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CSPAN
May 18, 2012 5:00pm EDT
in a conflict can be destructive to the united states but other countries as well and that is one of the things about military operations in cyberspace with cascading effect that are hard to predict. we have concerns about this and this is why we created joint military platforms like a strategic security dialogue to talk about issues that we feel our potential for friction in the u.s./china relationship. cyber is one of those areas. we don't talk about space, nuclear and missile defense areas as part of the strategic dialogue. >> you mentioned last year spending was almost double what the public acknowledgment was. what things will you give us as examples that they are spending on this year? you did not speculate on the number but what they are spending on this year but not publicly acknowledged? >> we think their nuclear force modernization occurs and research and development money that goes through their defense industry we also think is from a different budget, a different account. some foreign acquisitions come from a different account as well and some local contributions go to l
CSPAN
May 11, 2012 5:00pm EDT
plan for managing this transition i think it will withstand the test of time. at the united states in europe go their separate ways and figuring out how to preserve a rules-based system, then i hear that the next 20 or 30 years will be a very substantive period and international history. .. >> we are chasing to get out. we collectively, the reliance as you were just saying, senator, and i think it will be a long time coming before nato engages in the same kind of operation if engaged in in afghanistan. libya, i think the success more conclusive, but many of the conditions that were present in libya are not being replicated elsewhere, particularly in syria. a u.n. legal authority, the approval of the arab world, the degree to which libya was close to reservoirs of european power and, therefore, easy to the europeans did you even though they still relied heavily on us. in that regard i think some of the most important nato programs moving forward will not be the deployment of force, even though surely there will be some of that. they will be the broad array of programs, the partnerships
CSPAN
May 17, 2012 9:00am EDT
the barriers that are making our world such -- an unhappy place. >> over the years the united states and other democratic countries have imposed sanctions on the burmese government to pressure for change. now that there seems to be some progress at what pace should those sanctions be lifted? how does the u.s. provide rewards for progress without losing he have arerage for further change? >> i understand from a news broadcast this morning that senator mccain is thinking of the suspension of sanctions rather than lifting of sanctions. it possible first step. what has been done at the e.u., what has been done by the e.u., they would suspend sanctions but not lift them all together. that is a way sending a strong message that we will help the process of democratization. if this is not maintained we will have this think of other ways of making sure that the aspirations of people of burma for democracy is respected. i am am not against the suspension of sanctions as long as the people of the united states feel this is the right thing to do at the moment. i do, i do have a caution though. i som
CSPAN
May 29, 2012 5:00pm EDT
, understood it was not to protect them and it was to protect the united states from europe. they were basically and inconveniently at the wrong place at the wrong time and subject from -- to threats from russia if we made that deployment. the secretary put together a team to look at beginning to negotiate a new treaty. the decision was not to extend it, but get a new s.t.a.r.t. treaty. at the same time, a decision was made with the white house to use the negotiation of a new treaty to reset the relationship. a relationship characterized by mutual destruction, no longer the posture we have between ourselves and former soviet union, russia, towards a more different, more cooperative relationship that is mutually ensured state. that success of getting the new treaty and disescalating tensions was important and also got us a relationship with russia that enables us to work closely on things with iran, more successfully clearly than syria and libya, but the iran and north korea situation, we have a much more, i think, respectful and successful relationship in getting things done. we also w
CSPAN
May 9, 2012 9:00am EDT
no specific credible information regarding an accurate terrorist plot in the united states at this time and also comments by white house counterterrorism adviser john brennan when clearly there was a device that has been deemed to be a viable ied that was intercepted by the cia. how the administration can make these assertions that there is no credible plot underway? >> the statement was that there was no specific credible plot tied to the anniversary of bin laden's death. so, and that was and is an accurate statement. it was accurately made. the key point is that we will be taking all appropriate measures, now that the plot has become public, to make sure that the aviation and the traveling public remains safe. we will be working with airlines. we will be working with more nations. the tsa doesn't do passenger screening in foreign airports. they do that, so there will be and are all appropriate measures are being taken. >> it sounds like it was a parsed statement. >> did was, and it was for a good reason. it was because we needed to protect and are protecting the plot that was unv
CSPAN
May 8, 2012 5:00pm EDT
people thought was that was long gone -- in the united states is at the highest level in 50 years, and the incidence of the return of measles in this country is the highest level in 15 years. childhood im-- immunizations are important to keep hurt kids healthy and safe. there is money in this prevention fund which the house republicans want to cut out calling it a slush fund, to be used for diabetes prevention. mr. president, you can't pick up a newspaper or a magazine without reading about the incidence of obesity, the growing number of overweight children, and the increasing incidence of diabetes among our children. in fact, forms of diabetes that used to be confined to adults in america are now being found in children in america. and these children have to be treated with pretty powerful drugs to overcome this disease of diabetes. so the house republicans say let us reduce the amount of money we are using for public education and treatment to reduce the incidence of diabetes and instead spend it on student loans. what a faustian bar began that -- bargain that is. what a bargain with
CSPAN
May 10, 2012 5:00pm EDT
reauthorize the export-import bank of the united states be adopted, there be no amendments, motions or points of order to the bill other than budget points of order and applicable motions to waive. that there be an hour of debate equally divided between the two leaders or their designees prior to a vote on passage of the bill. the presiding officer: is there objection? mr. kyl: mr. president, reserving the right to object. i would ask the majority leader to modify his request to accommodate a few amendments. therefore, i ask consent that the request be modified to allow the following amendments -- corker, number 2102, financing for transaction subsidized by export credit agencies. vitter, 2103, prohibitions on funds used for energy development outside of the u.s. toomey 2104, $40 billion increase contingency. lee number 2100 phaseout. and paul 2101, limitation on ex-im support. and i further ask consent that following the disposition of the listed amendments, the bill be read three times and the senate proceed to vote on the passage of the bill with a 60-vote threshold. before the chair rules
CSPAN
May 22, 2012 5:00pm EDT
very important to cancer patients all across the united states who are looking to access these breakthrough therapies. so from the standpoint of driving an industry in this country that in my own state has median salary of roughly $74,000, and for the point of view of patient health and protecting our supply chain, this f.d.a. reauthorization is a must-pass. i thank the members of the committee and especially the chairman and the ranking member for -- for establishing a model really for how this senate should operate. and with that i yield the floor to the senator from new hampshire. and i thank her for her patience. mrs. shaheen: mr. president? the presiding officer: the senator from new hampshire. mrs. shaheen: i ask consent to speak as if in morning business. the presiding officer: without objection. mrs. shaheen: before i do, i should say i applaud my colleague from colorado, senator bennet, for the work that he's done on this f.d.a. legislation and as he pointed out, the good work that's been done by our colleagues on both side of the aisle to get this bill, to move it for
CSPAN
May 2, 2012 5:00pm EDT
responsible for planning and directing terrorist attacks against the united states. nevertheless, aqap continues to be al-qaeda's most active affiliate, and it continues to seek the opportunity to strike our homeland. we, therefore, continue to support the government of yemen in its efforts against aqap which is being forced to fight for the territory it needs to plan attacks beyond yemen. .. and appeal in the eyes of muslims around the world. >> excuse me. would you speak, the united states, what about the hundreds of innocent people we are killing with our drone strikes in pakistan and in the yemen and somalia? i speak on behalf of those innocent victims. they deserve an apology from you, mr. brennan. >> ma'am. >> how many people are you buying to sacrifice? why are you lying to the american people and not saying how many innocents have been killed? >> thank? for expressing your views. there will be a time for questions and answers after the presentation. >> pakistan, killed because he wanted to document the drawn strikes. i speak out on behalf of a 16 year old born in denver k
CSPAN
May 9, 2012 5:00pm EDT
. the fact is that the united states workforce needs to have the skills to compete in the global economy, and that means making sure that colleges is affordable because so many of the new jobs that are being created require higher education. and the reality is that students today face ever-growing tuition rates and that student loans are a critical bridge for them to cover these costs. but unless we act, over 7 million students, 38,000 in my state of new hampshire alone, 38,000 who rely on subsidized stafford student loans, will see an increase in their student debt when they graduate. now, this is a particular problem for us in new hampshire because our students have the highest average student debt in the nation. they are graduating with just over $31,000 in debt per stiewns, and not only do they have the highest average debt, but 74% of our college students are in debt, and that's the second-largest number in the country. so we have the highest average debt, the second-highest number of students graduating with debt. the fact is that students in new hampshire and across this c
CSPAN
May 22, 2012 12:00pm EDT
provide an additional incentive for aliens to enter, reside and work in the united states without authorization, which contradicts federal law and policy to remove such incentives." close quote. in july, 2011, again the treasury department, through its inspector general, issued a report that was actually entitled -- quote -- "individuals who are not authorized to work in the united states were paid $4.2 billion in refundable credits." close quote. so again, under this administration, the treasury department, the i.r.s. underscore that this is a huge problem to the tune of $4.2 billion every year. and so, mr. president, i urge all of us to come together in a straightforward, commonsense, bipartisan way to fix this problem. the fix is simple and it's clear. the i.r.s., the treasury department has told us we simply need to mandate that folks applying for the credit use valid social security numbers. that will cut off the fraud. that will cut off $4.2 billion going improperly to illegal alien families. it will not cut off the benefit going to anyone who deserves it under the law. and
CSPAN
May 21, 2012 12:00pm EDT
policy for the united states not to be involved with the private sector. now, as to the private sector, the amount of money we have at the federal level for africa is about $8 billion. the amount of money to be made helping the african people is hundreds of billions of dollars. the number of jobs to be created in america helping the african continent is millions of jobs. and we need you. we need you more than ever. so this partnership that we're talking about today is the future. no more money to dictators. money goes to people, and through the private sector it's going to get its best rate of return. now, my job was to and is to introduce secretary clinton. all i can say is that if you had to pick a person to tell the american story in africa or anywhere else -- and god knows we have our political differences, i have to say that. [laughter] for her own sake and mine. [laughter] but here's where we have a lot of commonality. she's dedicated to her job, she loves her country, and she understands the issues, and there are a lot of them in her job to understand. but more importantl
CSPAN
May 31, 2012 12:00pm EDT
industry in the united states for bringing broadband to a majority of americans because while the cable industry probably was a little bit of asleep at the real when it came to direct broadcast they were not asleep at the wheel to figure out how to grow their business. they were able to do technology and through a lot of hard work and risk-taking they were able to figure out how to do broadband through their cable plan and upgrade to digital. competition for to us do that. so now the most profitable part of most cable companies today is in fact that broadband plan they did in, in effect because of the satellite industry taking a third of their customers. >> out in the audience itwell really was the doctrine of cable labs with people like dick green and tom moore and others that gave the cable industry opportunity they had to take advantage particularly of satellite. >> we face it a bit today. netflix is forcing us how to things like over the top video maybe we wouldn't have thought about before and so you have disrupt tores coming into the business and our being asleep at wheel, w
CSPAN
May 1, 2012 5:00pm EDT
in the end it happens at the most, it changes at the most inconvenient time. . . they all have a view of what can happen. we don't, everyone likes to say we should put off the actual tough adjustments until the economy is taken. there is a presumption in that statement that the markets will allow us to do that. and i am fearful that the markets are going to say no at precisely the wrong, most inconvenient time. >> those markets as you personalize them, are they vigilantes? >> yeah. >> when you look at europe and you and i talked about this in a number of times we have spoken and you continue to go back to what i call cultural economics. not the purity of model make inc. or behavioral economics of bob shuler as he searches for a good society. cultural economics in europe is different than in america. gives the nuance not only for peripheral europe and eastern europe as they try to amend to the culture of germany. >> well just look at east end west germany. you have basically essentially two countries starting at the end of world war ii essentially from scratch. and the same language, the same culture, the same history and they grew up obviously when the berlin wall came down. the productivity level in east germany was one third that of west germany and then when the merger occurred, there was recognition that it was going to take a significant transfer of funds from west germany to east germany. to maintain the system. that flow is still going on. it hasn't fully come together. in europe, even a broader more difficult problem. i did an op-ed piece for the financial times maybe six months ago and i had also gotten and analysis which i have put in several distant -- different places which takes the issue of observing that when, as i recall, the meetings which formed the european central central bank, i was sort of part of the g7 and i would be sitting between all of these europeans trying to keep my mouth shut. >> were you successful? >> no, it never happened. but the problem basically is that there was a general expectation in the group before the euro began. recognition that there are cultural differences, but the conventional wisdom was that when the euro actually was implemented, the italians behaved like germans. they never dead, the but the markets believed they would do it because, as i recall it, the lira sovereign note, 10 year note yield at 500 basis points over two or three years before the euro went into place. by the time they actually moved into the euro, it spread it back down 20 or 30 basis points so that the markets believe that culture would we coalesced and enforced by the existence of a common currency. regrettably they were mistaken. what we have found is that it was the global boom which kept the euro system together but once the boom led down, then cultural reemerged in a massive way and the same consequences. >> because of time we could talk on this for hours, but because of time i want to move on. you and your john retirement have been looking at elderly assets. what is an elderly assets? >> oh, this is my explanation of why the american economy is stagnant. speaks of the things we talk about in the media right now are off the market? >> i think so. >> thank you. >> you are welcome. >> ask yourself, what is wrong with the american economy? and you can basically look at the gross domestic product and instead of looking at it as personal consumption expenditures and a variety of other things that it is, look at it in terms of how long the assets being spent will last. in an extreme case, a haircut last a month. the software will last three to five years. structures, industrial structures 30 years and residential musts -- much longer than that. all of the weakness in the american economy from where you would expect it to be at this stage is then assets whose life expectancy or durability is greater than 20 years. and what that is, if you think in terms of structures, is roughly 700% of the gdp and you cut it in half. you have got three to 4%. those three to four percentage points actually translated into the unemployment rate, explains the whole difference of what jobs are in the problem here is that they assets under 20 years are behaving pretty much the way they always have in every recovery in the post-world war ii era. >> do we need government policy to clear the market for those with longer age assets or to incentivize the building of those assets? >> that is what they tried to do too much and it's been counterproductive. what you need is -- before -- kobbe for a government to government i used to do a lot of work for a major corporation and capital investment projects. what we used to do is we would get the product managers and they would give us the forecast. the finance people would average the expected return and as a result of that, we quickly throughout all potential projects which didn't have a rate of return for the corporation. that then move to step two which is really the big determinative which is what what is the variance, the range of what our expected outlooks. for example if you're expecting an average rate of return of 20%, but it varies between minus 10 and plus 15, that project was in in very ably shallow and what we are looking at right now and the reason why if we are getting this particular shortfall of economic activity specifically and long-term investments is if you look at the cash flow of the american corporations, and the proportion they choose to invest in long-term illiquid assets, that ratio is at the lowest level since 1935. >> is that investment going abroad? is the issue here that with all of our studies of crisis and recovery from crisis, we are dealing with not only globalism but a reaffirmation of investment abroad? >> very little. investment has been doing rather well in american affiliates abroad, but it hasn't accelerated and they cannot very readily take the orders of magnitude that we are looking at changes in the united states and in any way describe them being shifted abroad. >> if i look at the medical charts in the median duration of unemployed or the use six unemployment, the spikes up that we have seen, they would tend towards less educated individuals. how would they fit into incentivizing business to make those structures? the answer is, we have missed a lot of construction jobs, isn't it? >> oh, it's not only construction jobs which obviously are very substantial part of the job loss, but it's all of those secondary and tertiary related issues. remember, when you bring that level of building down by half, it has an impact on the whole keynesian multiplier if you want to put it in those terms. so it shows up as unemployment not only in construction but in a whole series of other industries whose general level have been brought down by the fact that constructions impact on income and consumption in other investment has been so profitable for his. >> how do you propose that we jumpstart this so we start building structures? >> i think the first thing we do is stop doing what we are doing. let the markets calm down and i think the endeavor to actually try to support markets is counterproductive. when you have an unbalanced market anytime, whether it is stocks, bonds, copper, zinc whatever, that market will readjust one way or the other. if you try to support it, you will merely delay the it adjustment process. i think it's instructive, one of the only areas in which we endeavor to support -- we have not endeavor to try to support crises or values one way or the other. it's the stock market. the stock market is the particular area of the economy which has been untouched and we should just let come back the most. and it is not an accident. i think we have to learn sometimes leaving things alone and letting markets work is the way the system is supposed to function and the way it has and will. >> we can tread delicately on monetary economics without asking you when the fed will raise the target rate, i was talking to steve roach the other day at your university formerly of morgan stanley about the asymmetric challenges that any central bank faces and as you wonderfully quote in your book, you did not receive many phonecalls from politicians or presidents looking for you to raise interest rates. is a substantially asymmetric universe that any central bank works in. how do you fold the asymmetric realities into the desire for inflation parity? >> well first of all, what i actually said was that in all of my years, are got huge bushels full of mail. i cannot recall a single request from the congress or any other political figure is said to raise rates. every single one of them said -- kill it wasn't even asymmetric. it was just zero plus and that is still the case basically because the political system seems the short-term solution and the sending off of any semblance of pain. you cannot run complex capitalist society which the average age of assets is 20 to 25 years with everything being short-term. and, there are cases when the wise thing to do is to rob markets to liquidate. i think the best example i can give is the actual experience that we had in the resolution -- corp.. i was on the oversight board ex-officio and as a result i attended those meetings. i must have that must that they didn't have ended interestingly good job which i don't think we could do today. what they did was, 800 failed 20 or 30 years ago. all the assets fell to the resolution corporation to get rid of. it was easy to get rid of the mortgages and all the liquid assets, but then there was this very large chunk of assets which were 13 whole golf courses, 40 story skyscrapers of which eight had been built, and we could see the erosion of the maintenance cost of maintaining all the stuff, eating away and always eating our taxpayers dollars going down the drain. what they chose to do was to bundle all this stuff and billion-dollar groups and the billion-dollar spec then was a lot of money, and they hit the market. they just basically said, we are going to sell them and of course we expected 50 cents on the dollar and that is what they got. actually we got less than 50 cents. >> why can we do that now? >> basically what happened back then was the congress was up in arms but something very interesting happened. all the people on wall street are looking at this process whereby these vulture funds had wrought cheapened taught cheap and all of a sudden were making a ton of money. what happened is, that a movable inventory of unsellable assets was cleaned out in a matter of months and i think that reticular action by the rtc probably saved american taxpayers a very large amount. >> could we do that today? obviously are housing mess -- >> it would work but no evidence or political willingness on the part of either party to move in after action. >> you nicely got away from monetary economics fed discussion. you migrated away. you did a very good job of it. let's get back to central bank policy. central bankers have -- talks about the task of central bankers being arduous. in the past -- path forward for central bankers do they need to say do other institutions no, we at the ecb aren't going to do this. you are going to find the courage to do this? alberto at harvard writes about this. we need institutional courage. to the central banks just have to save no someday to the task at hand? >> basically, central banks were prohibited from doing certain types of things, and yeah i would say certain things which ought to be done by government, not by central banks. for example one thing that i thought was very unfortunate was in the interventions of 2008 occurred, which is once in a 100 year event which requires that sort of action, the only vehicle available to act quickly was the fed's actual legal authority to land lend virtually to anybody under any conditions. it was an amendment very rarely used and it was the only vehicle that would enable a quick response to occur, and so the federal reserve has the fiscal agent of the treasury accumulated lots of assets on its balance sheet and what i had -- what was going to happen very quickly is that the treasury would take over those assets onto a treasury subsidiary. and they didn't, largely because that would require the appropriated funds, which is ridiculous because it's one of the flukes and the unified budget accounting system and which as the expansion alone of the federal reserve, does not require appropriated funds but exactly the same use of sovereign resources by the treasury does and the only difference of whether it -- the assets are held on the federal reserve or the treasury is a balance sheet is the fact of the accounting procedure, period. and the inability or unwillingness of the treasury department to go up to the hill to get a pro creations for that is what created a big problem for the federal reserve because they were literally been involved very obviously in fiscal actions, which is now with the role of the central bank should be. >> you and others that you in particular have been criticized for not raising rates in 2003, 04 i am guessing. jeffrey lacher among other set in 1990 for you to get out in front with preemption. when you see the global debate, not the fed but the global central bank debate today, about when we raise interest rates, what data and view as a great student of data, what data should any central bank study as to know when to raise interest rates? >> well basically it is of necessity involved in the forecast. all central bank actions presuppose an outlook which you are dressing because obviously the impact of monetary policy drags out over time and you have to try to do differ what is going on. in other words, the issue of the question of our lower rates in 2003, think it was the right thing and i think it's still the right thing to do, it's insurance against the type of deflationary forces we are looking at now. but it never had any impact on the money supply. it had zero impact on long-term rates. it had no effect whatsoever in retrospect that i can see. even such a student and critic actually of the federal reserve milton friedman, said that the performance of the federal reserve from 1987 to 2005 was extraordinary, and excellent. >> but it is fueled the leverage that led to this housing boom? >> no, i think the housing boom comes out from a different force. it was low interest rates that induced the housing boom but it was long-term interest rates because remember housing is a long-term asset and mortgages are long-term. it is not affected by overnight raids. and indeed, what caused this extraordinary housing boom was a remarkable change that occurred after the fall of the berlin wall. all of these so-called third world countries which were under one form of socialism or another -- >> it long-term favorite. >> what they did is they essentially decided, looking at what happened to the soviet system, they switched and china became the most capitalistic economy in the world, and the extent of growth in china is really attributed to capitalism if i may put it that way for a chinese communist government. government. ineffectively what they were doing was creating a huge increase in income. remember that the rate of increase in the developing worlds, their gdp from 1991 forward, and especially from 2000 forward, that was a huge increase in the developed world's gdp which got so large they couldn't spend it. so it was all savings in a marketplace and brought long-term rates down globally. >> 75 basis points? >> no, no, it was far more than that. what it was however was important to recognize, is that housing boom is not an american phenomenon. we were somewhere in the middle and there were 20 countries with big housing booms. and the question is -- has nothing to do with united states. >> out to squeeze in one question i know peter cook has some questions as well. i believe it's a job opening at the bank of england, gemma o'neal and others are being considered as governor the bank of england. would you accept the job if it was brought up now? >> i would ask the current governor who is a good friend and an extraordinarily good central banker to stay in place. sir mervyn is doing an excellent job. >> we have a few great question submitted to us and we will try to squeeze one or two if we can. movements on the risk or bar of these as people search for yield and destruction and the wealth is very real. as rates rise, doesn't the bursting of the bond bubble have the potential to be much broader than the 2008 financial market at the conclusion? the? the its extraordinary difficult. it's something which was worse than the impact on the market that followed september the 15th, 2008. as far as i can see, bond prices inherently cannot move and so the sizes of the capital gains almost cannot he equivalent in that respect. that is not to say you can't. i think if you are going to look for the criteria, what type of things we are looking at, look back in 1979 and 1980. >> let me squeeze one more in here this is a quote submitted. this is the shabby secret of the welfare state tirades against goal. deficit spending is simply a scheme for the confiscation of wealth. gold gold stand in the way of this insidious process and stands as a protector of property rights. if one grasps this one has no difficult in understanding the status of antagonism toward the gold standard. the writers suggest if you wrote these words 45 years ago the end of an essay entitled gold and economic freedom looking back over 45 years. could you give us your thoughts on that as a two-day? >> i thought it was very perceptive myself. [laughter] ron paul right that question? >> that was not submitted by ron paul. >> in fact i had a very interesting conversation with ron paul when he was complaining that the house hearing here that the federal reserve should be going back on the gold standard. i said look, the mac and people have chosen the money standard because they want a welfare state. you cannot have the gold standard and the welfare state at the same time. you have to make the choice. we have made the decision as a society that we are dealing with a welfare state. i also told them, the normal practice of the central bank is to replicate the actions essentially that the gold standard used to do when it controlled. this is the gold standard before world war i, not subsequent. i think the markets today are telling us something very important, namely that gold is a currency. and it is by necessity have to be a zero-sum game. but, gold is the only one of them that doesn't require somebody's credit because there is no name associated with goal. gold is an acceptable for reasons in all the years i have watched i have never fully understood. what is it about human nature which attaches itself to this particular single thing that goes back. and it has never changed. >> i ask my wife that question. [laughter] chairman greenspan thank you for the time. tom, great job. >> i have seem to have earned a certain place where people will listen to me and i've always cared about the country. the greatest generation writing that book gave me a kind of a platform that was completely unanticipated. so i thought i ought not to squander that. so i ought to step up as not just a citizen and a journalist but as a father, husband and a grandfather and if i see these things, i had read about them and try to start a dialogue time trying to do with this book, about where we need to get to next. >> and competitive enterprise institute hosted a panel discussion examining the solutions to the nation's immigration problems. panelists, including immigration policy scholars, discuss state-level immigration laws and how they impact the u.s. economy as the supreme court reviews the constitutionality of of the arizona immigration law. this is 90 minutes. >> good morning. appreciate everyone being here. officially presented by arizona for immigration reform, competitive enterprise institute, national immigration forum and texans for central immigration policy. we are going to have an immigration summit right here in washington d.c. where we hope the benefit of which will be to offer some solutions and move some of our members of congress to get on with immigration reform. i m. norman adams, a texan, a co-founder of texans for central immigration policy. and just as a setting i would like to point out the fact, i don't need to tell any of you that the immigration debate is an emotional debate but that is nothing new. prior to 1923, if you arrived on the shores of as most of our ancestors did, if you came in first class, he went straight to your hotel room. if you came over what was known as steerage, you had to walk past, somebody looked at you to see if you look sick looked sick and then you might have to go to the station for a while. but we had no quotas. we had no quotas prior to 1923. and yet even then, and still today, you go to new york and you see little italy, you see little germany, little friends. you have your segments of the restaurants. you have a lot of people settle basically with their own kind. everyone can remember the sign in the window, no irishman or dogs allowed in here. i'm old enough to remember what day czech wedding was an inter-racial marriage. so the emotion of emma gration is nothing new. just a very quick rundown, i hear so often look, what is it you don't understand about the rule of law? well folks, that is the whole problem, is that our immigration laws are broken. 1986, we have got i-9 law created by her labor department that says if the identification looks to be legitimate, they otherwise qualify, you must hire them. we had the eeoc saying mr. employer if you don't hire them because you suspect they are illegal that is discrimination than we had the social security administration saying with a no match letter, this name doesn't match this number but do not buy this worker. your responsibility mr. employers to notify the worker to contact us. if you fire them, again you had the eeoc. that's discrimination. now, our great organized government in its wisdom has come a long and homeland security has now come along in 2010 and decided that if you have a no match letter, that is going to be constructive knowledge at the eeoc is still standing there to come after you for discrimination. so we have not -- god only knows, legally hired, italy killed immigrants since 1986 under the current system. and the current system is basically, it's bad law and at my opinion, and again i'm a right-wing republican. in my opinion, roe v. wade is bad law. obamacare is bad law. at one time in this country, it was legal to buy, sell and own black people as slaves. germany, it was legal to incarcerate the jewish. those were bad laws. our immigration laws are bad and hopefully we are going to hear a lot of good reasons for reforming them today. todd, are you ready to go? i want to introduce todd landry and i have a personal interest in introducing this man. i'm from texas, as i said. todd is the head of the arizona a a's dear i call it enforcement immigration reform but todd was the lone ranger on a white horse in texas. todd came down and testified to the texas legislature in this last session and let me tell you, we had 108 arizona style bills proposed in the texas legislature. that is two-thirds republican dominated, two-thirds republican, republican governor and 108 arizona style bills or you could call them russell pierce bills, that were proposed in texas. with tom landry's help we motivated our legislature to listen and think and enter meaningful dialogue. we brought broaden businessmen and todd, of course, displayed arizona as a test tube and showed us why it the laws don't work. so in texas, we are -- we have a great deal -- we give the credit i'm going to tell you this, to todd landry and the state of arizona. god bless you todd for coming. i feel like you helped texas dodged a bullet. todd landry. [applause] >> i think i need to give you another $5 now, right? on behalf of arizona for immigration reform i want to of the mutated days immigration conference. this is the sixth in a series of conferences that are intended to educate the public about the impacts state-level immigration laws have and are having on those places that have them and to suggest alternative solutions that could better address the problems without the damaging consequences. today you are going to hear from people who have dealt with this issue not just from a daily basis, not just the think-tanks from organizations with axes to grind but organizations that want to solve the problems in a responsible and effective and cost effective manner. those solutions actually exists. you just haven't had an opportunity to hear about them and you're going to hear about them today. i want to thanks sponsors of the program, texans for immigration policy, the the national immigration reform for their support in the event and last but not least we want to extend our thanks to arizona congressman ed pasteur for assisting us in reserving his room for today's event. we appreciate his willingness to sponsor this event, where the broad spectrum of clinical views, norm adams, going two for presented here today. this isn't a partisan thing. this isn't conservative. this isn't liberal. this is a conference where people from different views are going to come and explain how we can help solve this problem. finally, as you can see, today's program is being aired nationally on c-span3 and we want to thanks c-span for their interest in sharing the ideas of the conference with the american people. here is how today is going to work. we have two panels in the first one addresses what we have learned from the past several years of local attempts at immigration laws. it was family and pecks on business the economy, social and faith group communities but we are not going to be talking about the loss constitutionality. the second panel revives alternative solution should immigration policy from the perspective people who have lived on the borders or can live for or have been at the border for news. each will have eight to 10 minutes to give their remarks lullaby "q&a" and we would encourage you to ask many questions. hi matt. at 1110 to 15 we will break for 15 minutes so you can grab lunch and then we will come back and launch into the second panel. so we understand that immigration is a controversial issue and we know some people in his room may have strong views one way or the other. some of them permission you're going to hear today will challenge the conventional views, and that is part of our purpose. just as the information we provide today is going to be presented in an informative and respectful manner, we hope that everyone here will be respective of those views as well. so with that let me turn it back over to norm adams who will introduce our first panel. >> thank you, todd. i am going to introduce brittany right now. brittany nystrom. come on up, brittany. she is the director of policy and legal affairs for the national immigration forum. the forum's mission is to advocate for the value of immigrants and for immigration to the nation. her adequacy focuses on immigration reform, civil rights and human rights for all. i'm not going to read all of this. we are going to hear from you. >> thank you everyone and i just want to start by saying that talking about solutions is a great game for any immigration conference. we all know that our current immigration system is full of problems and we spend a lot of time talking about those problems. i'm guilty of that myself, but not enough time really doing the hard work to get toward a solution. i want to thank the organizers of today's event for bringing the pols feet together where we can do the real 30 work of figuring out how to move forward. so what are these problems that we have in our current immigration system? i'm going to just give a brief overview of some of the stickiest issues we are dealing with. we have families who are separated, who are seeking to reunite that are supported by our immigration system. with businesses who are seeking a stable and skilled workforce. we have workers who are seeking protections and the opportunity to thrive and we have taxpayers who are seeking an efficient and smart use of their taxpayer dollars. these problems are threatening both our heritage as a nation of immigrants and their status in the land of opportunity for people from all nations. we have probably all heard stories about the family separation problem, families waiting years to reunite while they try to navigate through our thorny immigration bureaucracy or if they get tired of waiting, risking their lives to cross the desert to rejoin family here in the united states. we likely have also heard stories of farmers unable to harvest their crops without the help of immigrant workers they depend on for high-tech businesses unable to harness the talent of immigrant employees who are either lost in our maze of immigration visas or are in fact-driven to our competitors overseas. what you may not have heard about is the financial cost of a broken immigration system. in a time of shrinking budgets, it's a perfect opportunity to find a solution that meets our physical needs as well. we have spent billions of dollars each year in forcing a set of immigration laws and probably most people can agree they are not working for america. for fiscal year 2012, the year we are currently in fiscally, congress spent 11.80 yen dollars for customs and border protection to enforce the immigration laws. in addition 5.5 billion was given to the immigration and customs and enforcement. the government spends an estimated $23,000 to deport a single individual and the obama administration is deporting people in record numbers. so what are we getting as a return for this investment? that is the question that all taxpayers should really be putting towards their elected officials. along our borders in specific we are seeing a diminishing return on this investment as the border security spending climbs up, up, up, up, we actually see the number of immigrants attempting to enter into legally at record lows. so there is an imbalance there exemplified by our border. so what does a solution look like, and i'm looking forward to hearing all the panelists views on this. we know the laws on the books might be enforced, but enforcement should be carried out in a smart efficient way to prioritize keeping us safe from threats to public safety and threats for national security. in forcing broken immigration law does not serve our interest as a nation. in fact, immigrants have a system that they can go through to become american, fewer people will try to go around the immigration system. finally, instead of spending billions of dollars year after year to track down, detain, did and deport immigrants we should implement a program that requires all unauthorized immigrants to register with the government, pay a fine, pay any back-taxes they owe and learn english. a legalization program would be a true and lasting revenue generator. according to some estimates, a legalization program with this the u.s. economy by an estimated $1.5 trillion. that would be an added u.s. growth -- gross domestic product. thank you for giving me the opportunity to share my opening remarks and i look forward to engaging in the solution conversation that we so desperately need. >> thank you, brittany. todd, in the interest of time i'm going to bring these panelists at. you want them to move on up and where were the moderator be? right here, okay. we are going to have eddie aldrete on the closed-circuit, on television. eddie aldrete is the senior vice president ibc bank in san antonio texas. texas boy you graduated from the university of texas. i can tell you in texas he has been a leader is if not the leader in sensible immigration reform and we owe him a great deal of gratitude. i think you are going to enjoy his presentation and if you haven't seen this video on icebergs, you definitely need to see that. alex nowrasteh, where are you? cato institute. i think everyone knows alex. if they don't know him they have gotten his e-mails. god bless you for being here alex. reverend phil reller, where are you? appreciate you being here from los angeles. we have darryl williams -- baird. this is the man who said they sure to tell you he is a right-wing republican but darrell is most famous for, he is a trial lawyer lawyer both defense and plaintiff but he is the man that led the charge to recall russell pierce. russell pierce 1070. this was the man that read the charge to recall russell and vote him out of office. thank you, darryl. and marshall phipps, do you want to be our moderator? he is with the director of immigration policy. i would like you folks to get with the program, thank you. >> thanks so much norm. everyone who is worked in into in the to convene this discussion and congressmen pasteur for hosting. wild political prowess has prevented congress from tackling an overhaul of the immigration system, it's an overhaul that has been pointed out that is long overdue and one that many of us have been trying for many years to achieve. the pressures of a large undocumented population continued to be foisted on state and local governments and communities. opponents of immigration reform have opponents such as russell pierce that norm was just mentioning have persuaded local elected officials to pursue what is i think a deeply misguided strategy that they call attrition through enforcement. the idea that is to make life sowed difficult and harsh for undocumented immigrants that they will pack their bags and leave. that is a simple vision that ignores the really serious challenges confronting state and local government. >> it strategy of avoidance that this serves. social safety and economic priorities. every honest observer can say we are not going to deport 11 million people. it's just not going to happen in any long-term solution to our broken immigration service had to have a program that requires undocumented to register, go through back round checks and pay taxes and learn english. in the meantime though, state and local officials to govern their jurisdictions in a way that maximizes the interest of their constituents while dealing with the side effects of this broken immigration system. state and local leaders have tough choices to make in dealing pragmatically with a sizable undocumented population. deciding wisely wide deciding those decisions can generate significant public support and will increase the unity and stability of the impacted communities. as you all know the supreme court has expected to decide in the coming weeks whether it should have the authority to enact these attrition's reports from policy. i for one believe that these measures are crude -- clearly printed by law but we will not be debating the constitutionality of these measures today. instead we want to highlight why those measures raise a the number of red flags that should stop policymakers in their tracks before and acting such measures. the center for american progress has explored three basic questions related to these laws and the answers on vigorously point to the conclusion that these state efforts and initiatives are misguided just as a matter of policy. first and perhaps most importantly these measures plainly do not and cannot solve the problem. at best these measures displace some of the undocumented population to less hostile states or communities. at worst they drive the undocumented population deeper underground creating even more dysfunction and more challenges for local communities. what they don't do is drive undocumented workers and their families out of the country. we have got several reports on our web site to speak to this. secondly second we have documented the cost to states that are directly connected to the enactment of these measures. for example in arizona, we calculated in the wake of s.b. 1070 passing that the state lost at least $140 million in direct spending due to the cancellation of conferences that were scheduled to be hosted there. georgia lost an estimated $300 million in on harvested crops with a potential statewide impact of a billion dollars. those occur just because of the climate of fear that was generated by enactment of these measures, not even because of any direct correlation between the law and the economic effects. now third, we have also explored the potential economic and fiscal cost of the policies actually did succeed and what they were purporting to achieve. unsurprisingly, these measures have been shown to be deeply counterproductive and self-defeating from an economic perspective. for example in arizona we are moving 7% of the state's population would shrink the economy by nearly $50 billion would operate more than 580,000 jobs and it would produce the reduce estate tax revenue by about 10%. so, there are again a host of strong policy reasons why a state legislators and policymakers and governors should choose these initiatives and we are going to be talking a little bit more about that today with some of the panelists you have seen up close and personal on what those impacts look like. so that will -- let me first send it to eddie aldrete and i will let you make your opening remarks and then we will we will turn it over to the other panelists. eddie i'm going to try to put up the -- >> i hope you can hear me okay. >> i think we can hear you great. >> well, i want to share a couple of things. are you able to hear me? , yes, we hear you great. >> okay great. i wanted to share a couple of things. unfortunately when they talk about immigration we tend to get mired in the debate of what part of illegal do you not understand and the amnesty conversation and all the parts of the state attended the polarizing and very emotional. the part of the picture that i believe we are missing is related to demographics and i just want to share a couple of things with you to sort of help make that point. number one, as we all know, many baby boomers have already begun to retire. we have between 77,000,080,000,000 baby boomers at a bar to begin to retire. unfortunately there's only 67 million people behind them that are entering the workforce so that leaves 10 to 15 million more people that are leaving the workforce than are entering the workforce that we are going to experience major shortages and we are already beginning to see some of those taking place. the second thing i want to highlight is our national fertility rate. most countries, all countries, have to have a fertility rate of 2.1 children in order to maintain replacement level, and so that means every adult female needs to have on average 2.1 children. right now the united states is at 2.1 and we continue to decline. but when you look at the 2.1 figure and you break it down by demographic groups, anglos, asian-americans and african-americans are all below replacement level between 1.8 and 2.0. hispanics are the only demographic group that are above replacement level and they are there are 2.9. where are beginning to see that in many parts of the country where hispanics are clearly producing future workforce of the country. so you have more people leaving the workforce than entering the workforce and we are beginning to have fewer and fewer children. no country in the history of the world has ever experienced economic prosperity while also experiencing depopulation. you are beginning to see depopulation in countries like russia and japan. many believe that japan is past the tipping point in russia's population shrinks by 700,000 people every year. and in russia, they have tried numerous things, including creating a new federal halliday which is a national day of procreation where everyone is asked to go home, turn out the lights, close the curtains and do their patriotic duty. [laughter] now if you take a look at what is happening across the country, one of the things, when we talk about immigration, is the many members of congress and people who get very heavily involved. they like to move from immigration over to order security. they are two separate issues but i want to share one statistic that surprises a lot of people and that is that 52% of the united states border patrol and customs agents are eligible for retirement this year and 2012. 51% of all customs and border protection agents are eligible for retirement this year. don't take my word for it. that statistics come from the gao. so when a member of congress or a presidential candidate or anyone says we need more boots on the ground, my question is where do you plan to get them from? now border patrol isn't the only law-enforcement agency that is experiencing difficulties. the dea has lowered their drug standard in order to become a dea agent. the fbi has lowered their standards in order for you to become an fbi agent. local law enforcement agencies here in texas across the major cities are now cannibalizing from each other, offering $20,000 signing bonuses in order to cannibalize the neighboring cities, the police department. why? because many of these law enforcement agents are made up of retiring baby boomers and so when you look across the country, if you want to get stuck on how high the border fence should be, my argument is rome is burning and no one is paying attention to it because it is forwarded in the demographic changes we are beginning to see. now here is another major factor that unfortunately people are not paying attention to and that is that for centuries, people moved to where the jobs were. we have seen this migration pattern from rural areas to urban areas. the problem is now that jobs are moving to where the people are. that is why microsoft software to the software engineering plant in vancouver, opening 1500 jobs. microsoft has a multiplier effect which means for every job microsoft creates, four others are created in the interesting -- to support that job. not only do we send high-tech hide job -- skilled jobs to canada. meanwhile california agricultural producers are moving their operations to mexico. why? because they can grow their produce their and labor is plentiful. i still want someone to explain to me when it became a good idea to grow our food supply in another country. so all of these are economic compromises to our inability to solve this problem and to have meaningful immigration reform. i just want to mention a couple of other things. the elderly population according to the american association of medical colleges, the elderly population in the united states is expected to double between 202,030. we are already in 2012 so the problem with that is one third of the workforce is made up of baby boom doctors. so if one third of the physicians are leaving the field when the elderly population is doubling, we have a declining number of people per capita since 1980 and my question is who is going to be taking care of these people? so if you look at the aerospace industry, 40% of the aerospace industry is eligible for retirement in 2012. we have been in iraq. we have been in afghanistan. we are concerned about israel and iran. three or four years ago the secretary of the air force said we had a geriatric fleet and the entire u.s. air fleet had to be replaced. keep in mind when it comes to our tankers and are refuel or sand art cargo planes, those planes are traditionally twice as old as the pilots who fly them. dwight eisenhower was president when the casey 135 and the c-130's were built. so how do we ramp up production and replace our aging fleet when 40% of our workforce is about to go out the door and retire? we have an option. we can either import labor in order to keep up with demand, or we can go the way that europe has gone. all of europe is far below replacement level when it comes to fertility rates and i want to repeat this very important point. no country in the history of the world has experienced economic prosperity while experiencing depopulation. finally, i will end on this point. if you look at mexico, mexico's fertility rate in 1960 was seven which means the average adult female in mexico as having seven children. today they are at 2.2, right in the united states and they are expected to fall below replacement level about five years after we are and we are already there. so the only future pocket and we ever be seen some hispanic data that people are migrating back to mexico, the only future pocket, human capital are going to be coming from countries like india and china for a short while and many of the countries in africa. so we have a choice. we can either import the labor that we need to keep our economy going or we can declare an a new federal holiday and start a national procreation day. with that, i will stop. [applause] >> thank you so much, eddie. that is great and i'm all for the national holiday but maybe we can do both. call-in cult. .. is what is staring you in the face. i want to attack to you from the angle of vision of representative of diverse faith communities, serving diverse communities comprise step undocumented people, recent immigrants and other citizens that s.b. 1070 and its cousins like george's h.b. 87 in alabama's h.b. 8656 have negatively, significantly and negatively impact their communities. others said he will speak about the damage is already down to arizona's economy, which the arizona legislature itself admits millions lost from lost revenues to to raise them, unemployment rates exceeding national averages, businesses opting to locate other places, regulatory business practices set for growth and impact of departure of young, strong, creative entrepreneurs and [cheers and applause] used. how to use in people stories. but stares us in the face for instance our 11 latino congregations comprised of undocumented and citizen who have the very city where the author of s.b. 1070 russell pearce lives. that pulls mom-and-pop restaurants, mom-and-pop stores and these ambitious creative men and women who have come to a new place and been able to initiate commerce and economy. it pulls their children, pulse purchasing power and even more importantly perhaps it pulls that kind of support within a community like having a babysitter for a friend you can create at the bus stop or say hello to at the post office. it pulls them out of your economy and not of your community itself. i called a pastor in alabama's head was going on in birmingham right now? he said everybody ran. crops are sitting unharvested. they brought in some other workers who work for one or two days and i must. we have a food pantry at our church where we assist with me. the needs are still there, that people are too frightened to come and meet them. we support national reform. a way to document those who want to stay so that we can support them. laws have been made which complement welcome and care. what we see her women whose husbands go to work or vice versa and their cell phone battery may die on the job and they call them and they can't have a voice mail they wonder, it may have been our spouse then picked up on its feet? for me and my family see them again? we see people on the edge, self containing two self-imposed foundries and borders between two freeways in arizona and two major cross streets within a three-mile radius they work only in that area, shop in that area and return home because they were afraid to go out of that area. we also see increased voter registration among latinos. we see participation in barrio defense groups and we heard a young girl probably about age nine cry out and a community forum, my daddy is not illegal. he is sergio. and he is my daddy. you claim liberation by first reclaiming your name and then pay reclaiming your being. obfuscation of the truth goes to the very beginning of the popular story about how s.b. 1070 came to be. you know the story. independent state legislators frustrated by federal inaction of our national immigration crisis boldly took it upon themselves to create legislation to combat among other things that illegal immigration and secure borders. they were hardly independent act and legislators. s.b. 1070 and nearly all other similar legislation or present similar and others date was drafted, quote unquote by members of the legislative group of federation for immigration reform. you know that. they're publicly announces its mission to fight our massive immigration crisis. it raises the question, which i invite you to consider because the way you answer this question will help you determine what solutions you buy into. when and why did our national common good become threatened by immigration? back to fair, president dan stein in the first two i quote, works to ensure america is the same livable place we inherited from our parents and our forefathers whose parents, which forefathers probably not those who lived in the southwest vibrant cultures and vibrant economies before plymouth rock and well before most of the legislators drafting this legislation and families ever step foot in this hemisphere. here is what we see an agenda, and efforts to a certain culture superior to others. fares influenced by a christian reconstructionist theology which he anti-federalist ideology, which declares the u.s. constitution guarantees to many rights to too many people. we know which people deserve the rights and which don't. cultural imperialism is wrong. racism is deplorable. both are evil and evil can only be obfuscated for so long. eventually it comes clear. a sure sign when it turns and devours it does serve in. s.b. 1070 and nowhere attrition through enforcement, has nowhere created health and community is only broken. salsas data, family lived in arizona for a generation. he was working in his yard and remembers he had to mail a letter. so was the central deacon, never been in trouble with the law, gets along with this community fine. went to the post office but still had his jeans on an extra half. he was followed by police and stopped in the post office. we please get out of your car? so you show us your papers? whatever is done done, sir? you know that dress becomes the way for law enforcement officers to be calm enforcers to determine the likelihood of a person being illegal. i don't know a single latino family who has not had a family member stopped in a similar way. i would not have been able to say that a year or two ago. proponents of s.b. 1070 proclaim enforcement policies will assist us in preventing terrorism. trust me, there are more people who look like timothy mc dey driving through the streets of arizona fanlike solipsist ida and we are not getting stomped. we see papers selection process is more about driving especially if you're wearing a straw hat. talk about the erosion of common goods see nothing about the rule of law. one final story. roosevelt is 14 years old. i matter when we were speaking together. she came out to me before i spoken to pastor, will you please pray for me? the sheriff's deputies came and took my father and mother from our home today. after a satanic is about. 14 years old. she told me the story of her father, armando. armando grew up in my salon in the southwestern part of mexico and was recruited to come in the late 80s to the border as we dyed water as an el paso to work in the? at your attire. international companies from china, australia, korea, united states, recruit 300,000 people to live in the colonial opera without electricity without water. they were 432 pesos a day when i first got up there. they devalue the peso and half toys. so after a couple years they were earning a pesos a day. which at that time was 10 pesos to 1 dollar. they worked hard and took the city bus into the city of war as to build their houses, community centers, churches. while the mchugh adored uplands decided they could make more money by moving into the center of mexico. and then into central america and the southeast asia. armando worked at the plant which was generously 10 and he could have another job if you wanted to relocate to new mexico, albuquerque, phoenix. he opted to go to phoenix and they helped him with his immigration papers and he and his children. the maricopa county sheriff's office came because his paper had been in the work for 14 plus years had not come through and he was illegal. he took roosevelt his mother and father from her home and left laughter is a valid to care for her alive and, nine and 6-year-old siblings alone. talk about an erosion of social conscience to say nothing about our punitive path towards citizenship. s.b. 1070 others are not creating safe communities. they are breaking them. what kind of value system is that? and finally and in addition in this country that has been proposed, it is illegal for me to members of the sikh community to offer care to transportation, assistance to people who have crossed over the border. often the great political engine that drives our lawmaking scam than five overt track oil by eco-and political expediency, but sometimes it sinks into the stable track of progress, emancipation, civil rights, south african truth and reconciliation and suddenly people start hearing words like this being used in forming public policy. fairness, a quality, forgiveness we had love to begin of integration solution from foundations like these. thank you. [applause] >> terrific. thank you so much. there'll come i think we'll i think we'll turn to you now if that is okay. >> happy to do that. >> by minister williams, commercial trial lawyer. as banal as 36 years in the courtroom. i like the courtroom. and one of those trial lawyers who goes to trial, by the way. i think there's a lot people who say they are trial lawyers and all they do is settle. i have tried hundreds of cases and yesterday i was in trail in court in yuma, arizona and as i was flying my plane back from yuma to phoenix, it occurred to me that yes, yuma, arizona they picked 12 million heads of lettuce a day. if you go to your story here, you probably came from yuma and all that lettuce is picked essentially by people who come from mexico and pick that lettuce for us because the population of the united states won't support that type of industry. i am a mormon, proud to be a mormon. and russell pearce was in a huddle a mormon district in arizona and i was offended by his bigotry in his jingoistic approach to hispanic people. i come from a right-wing republican family. i myself am right of genghis khan. i will tell you without wan this immigration became an issue in arizona come onto my brothers called me up and then let's join the group there goes down with their guns. let's get our guns and go down to the border in force this border policy. and i said now my brother is a business man. and i've been a lawyer. i said let me think about this a little while. and so i began to study it out and to write an essay which is available i think on the website or if you don't have it teach you -- if you go to my bio, right to daryl williams at bw.not all send you a copy because i want to study out what it was what made people so emotional like i was preparing to go to the court room at our immigration policy made no sense and i wasn't going to join the minutemen and go down there with my guns and try to protect our border because it made absolutely no sense. i have to tell you a few years ago, 10 years ago i decided i didn't know spanish so i taught myself spanish and i did that because the mormon church has a very large -- over half the church speaks spanish. i thought i'm devout mormon. maybe atoning case the church needs to use me somehow. i've got a lot of clients because they speak spanish. it's been a great boon for me. and sure enough my church asked me to speak in a spanish-speaking congregation were for not playing nobody there had documents. but these are wonderful people and i loved them dearly. i thought my gosh, they are religious, family oriented, epitomize what has made our country great and i agree we need those people coming here to re-energize us. to re-energize us. became the way us. became the way that he did, as something had to be done. so it may set and i sat on the high council of the mormon church, which really doesn't mean very much i tell you. but i am fairly well known in arizona, phoenix and so i started giving what is called fireside. i sat down with people who were mormons to talk to them about immigration and i'll tell you that predominantly the people who came to those meetings came with the attitude that i was crazy and i didn't understand this fact that we've got laws and these people are illegal, don't you know. but part of illegal don't you understand? i can't tell you how many times i've heard that. but if you give me 45 minutes or an hour with any group, whether they are tea party, the strongest proponent, they will either get up and walk out showing their bigotry or they will be persuaded that there is something wrong with the likes of russell appears and the likes of bills like 1070 and there is a need to change. i was always impressed. i read the biography of adolf hitler a few years ago. as in germany and so i picked it up. i did not know that the thing that kerry to hitler on as way as other sensitive issues with sigmund freud who is an austrian you see, hitler read or had read was informed about the comment in his book, saying that i'm going to quote this year, a group is extraordinarily credulous and up into influence. it has no critical faculty, does not exist forward. it digs in images which call one another out by association and his agreement with reality is never checked by reasonable function. the ceiling and group so the group is neither doubt or uncertainty goes directly to extremes. this suspicion is express comments until he changed and incontrovertible certainty. a trace of antipathy is turning to hatred of anyone who has to produce an effect these down adjustment he must repeat the same thing again and again. if you want to repeat the same thing over again and again this group will not think critically about it. you need to have the sort of educational experience that i could have when i met with voters and russell pearce's district and informed them of the reality and the facts. and once i could educate those people, then i could win. now here's the problem with politicians and your site couldn't be a politician. my lab partner with the house later for about 10 years and he and i have this particular debate about what you cannot bend, which you can have have been politically. and i don't care what can happen politically. i am looking for what is right and what is wrong, what is good and what is bad. and i know think that anyone is obligated to sitcom to a bad lot. and we all know examples of bad laws. and then i retrospect, we have to believe they were bad because slavery in america is an example of that. we've got in germany at that. it's illegal to harbor and yet now we make heroes of people who ignore those laws. i have hispanic people who work inside my house and inside my yard. they don't speak english. i have no idea if they're legal or not. i'm not going to pass them. i don't care. these are good people who work for me. starting in the 1920s, we had horrible things begin to happen in the united states and here is the fact they're probably many people don't need to know. one of the laws that was instituted i'm going to reach you a quote here by senator david reid. he was a big opponent of these immigration laws in the 1920s. this bill is for those of us who are interested in keeping americans stock up to the high standards. that is people who were born here. there's the old nativist movement in an 18th century, even benjamin frank unheated immigrants. he said the economy or and don't want a language and we shouldn't have these people here. we have senator reid in the 1920s who is a big proponent of immigration laws. and guess who used that in the words of our good senator reid, to justify what he did to the in europe? i think that the solution to immigration is education and letting people know what the real facts are. the fact that arizona suffers in the billions of dollars because of things like s.b. 1070. the fact that they are not a burden on our society. how many times have i heard in speeches and in the press, wow, you know they use are emergent day care services at the hospitals. i'm going well, yeah, those are disproportionately used and why do we talk about that. and if you look at the benefit cost of those things and for texas. and so i don't understand what's happening here. and by amanda speak in a group somewhere. teacher merce jingoistic right-wing teapartiers or anybody like that and give me 45 minutes with them and they have to change your view or say regrettably like my law partner said to me after i type to hand. he says i just don't want to talk about this anymore. i can't argue with you on the fax in your reasoning, but i know what i believe and that's what i believe and i don't want to change. that is the attitude we need to change your america. there's lots of god to be fixed. i wish i had an hour to type to you. >> thank you so much. [applause] >> so we may inviting me to speak. we'll turn our backs to conclude the remarks that will open up for q&a. >> thank you you i want to begin by thanking the competitive enterprise institute, national integration forums and sensible immigration policy for putting this conference on. let me begin with just some simple facts about the economy of arizona. immigrants are businessmen can employers, consumers, renters can investors come out of print or some arizona opera; the grand concentrate in certain sectors of the economy and these are the ones most heard a s.b. 1070 similar bills. data firm prior to the great recession so i can demonstrate to you just how important immigrants are for economic growth. 44% of workers and agriculture are immigrants. immigration enforcement has destroyed many farms that grow fruits and vegetables in the state, force others to grow more expensive less profitable crops like wheat they can be harvested by machines and move a lot of crops and activity in the border to mexico. 23% of workers in arizona are in the construction industry. the construction industry has been decimated by the housing collapse that has been heard even more in arizona because of wildlife at 1070. housing prices in june 2006 through to the trot at september 2011 they declined a whopping 55.9% in price. was a second-worst decline of many many american major city in the united states. immigration policy did not deserve all or maybe than most of the blame for the decline in price but one major reason why it was so great and the next is because the state drew about 100,000 people with s.b. 1070 and the additional 100,000 people with the other previous law and sanction law. 100,000 unauthorized immigrants, mostly in maricopa county would have rented or bought quite a few houses or rented them and so down the housing price collapse but they couldn't because they weren't there. 20% of workers in manufacturing immigrants. fabricate metal was hurt tremendously but a great reception but having the work force diminished by these restrictive laws and attitudes allowed to increase. leisure, hospitality, services, wholesale trade and numerous other industries have an immigrant work force larger than percentage of arizona's foreign-born population and may have also fared more than other industries in the other state. arizona's employment rate has been at or above the national average since may 2008, not long after the employer sanctions law went into effect. s.b. 1070 like employer sanctions is mostly about punishing businesses are hiring the labor they want. for those of us who think highly of free enterprise and individual liberty and the government should be smaller and less intrusive, s.b. 1070 combines the terrible work-based interventions of american left-wing social law with american civil liberty violations onto one contact bill. the state's mandatory verify program. and it links to a diaphragm agencies like the fbi come immigration services, department of homeland security, and other agencies to verify work is eligible for the glimpse we been in the united states. he verify slowly been combined the state level is to the so-called right initiative, which will then link up photographs with these results. for businessmen are supposed to do is take the identity information of new hires and check it the database. most of the time the system works alright. too often workers are not approved. if it cannot prove he is really authorized to work in a timely manner the worker is not legally allowed to be employed. we have laws in this country that mandate that workers ask permission from the federal government to get a job. that is not a free-market economy if i've ever heard one. most of the time either fireworks time. he verify produces an inaccurate result. derek identity system are not caught by either a five and worse than 1% of legal american workers were probably the arthritis. try to fix the records which sometimes required privacy act request with the federal government which takes 104 days to require. when intel corporation arizona submitted numeracy verifier queries in 2008, 12% of its workers were not confirmed. these workers will eventually cleared and authorized to work, but intel said it was quote only after significant investment of time and money, lost productivity and effective foreign national staff come in many hours of confusion, worried and upset. another arizona firm, mco enterprises which owned dozens of restaurants reported as if he verify queries were not confirmed. worse, the nonconfirmation race for the go foreign-born workers was 75%. that is because of the whole federal databases that haven't been killed. these examples and reasons are why since 2008 either if i was mandated in arizona 30% of new hires in the state are not checked through the program. that number has been remarkably steady since 2008. arizona's first in good workers and businesses to the black market but better than dealing with the verify. at least in the businesses% days. hiring employees expensive. when you make it more expensive to hire people you will get if you don't want that result, i suggest that you encourage people or not be a proponent of the verify. in conclusion they harm and he verify and makes it more costly to hire workers in fear means entrepreneurs and consumers that produced -- that can stand the american goods, services and real estate produced in the state. arizona has been especially hard-hit by housing collapse and subsequent great recession partly because of immigration courts and policies. arizona could not have such policies at the terrible federal immigration minus not in the. the vast majority of unauthorized and potential immigrants, there are no visas available. that is the simple fact. federal immigration reform should administer employment decisions and allowing players and employees to make their own arrangements about government intervention, even if they happen to be different countries. [applause] >> so we have heard a pathway of reasons for why we need federal immigration reform. for the moral imperatives but what it means not at least the economic implications of broken immigration laws. i will open it up to you all of you for any questions that you may have, but as you guys are thinking about your questions -- okay, we'll start right off with you. >> my name is kimberly, candidate at george mason university and especially smith's immigration and trafficking have been working hard night of the past six years and i just wanted to touch on the point that the trial lawyer, i'm sorry forgot your name with regards to education as the solution. i agree with you, but my question is for all panelists, is there enough evidence to conclusively educate? my dissertation, which i'm a machine that asked the question, does 287 disproportionally affect the number of latino brought into the justice system and from my experience on that issue and many others, there is not enough evidence or not enough data sets available to me than answer that question on a generalizable level. and so, before i think that you can offer solutions and present possible policies that might actually work need to have the s possible to say was going on, how weekend that congress and other organizations more research to a rigorous research because there's a very famous mark twain things sane various statistics because either side of the debate can present shoddy evidence to support your position. so i would just say, to think that evidence exists? >> let me respond to your question here. >> i like you i'm very skeptical when it comes to evidence and i spent my life in a courtroom cross-examining people because i have an expert assessment is doing my job is to destroy that person. more often than not i can't because i can show other statistics that counterbalance that. the education i am talking about is not statistics. that is misdirection. the direction i'm talking about is what is this country about? so let's start with fundamental principles. what makes the free market work? what type of morality undergirds this issue? what is the work on the move that holds our community together? i never get to talk about that in the court room because it is a cold facts of what you're talking and who is right and who is wrong. my view is no one is right and wrong in the courtroom. it is when in the spirit on a major issue like this, what you need to do is educate people about the underlying principles of humanity and goodness and the good reverend here todd about that. and i think that is the important issue and that is what i talk about when i talk about her immigration laws of people. i stare up at the initial naturalization acts in the 18th century, the early 19th century, the chinese exclusion act signed by no less president chester arthur in 1982 and metamorphose coming in now, we have a history of the briley is bigotry in this country. those that are here want to iraq to live. there is a 1920 political cartoon that says, keep out -- and there is a wall at the border and uncle sam is on one side and says, no way. the people on the other side are irish immigrants. and so, the refrain has remained the same. this is the focus has changed over years. it is the movement of the 19th century was shocking. it is the history of the issue got to be the principles of free country like america. the united states supreme court on this issue a little while ago. it's about 5000 businessmen in arizona. and it's replete with the kinds of statistics to the effect the commerce clause. but that is not the education. the education is and which are doing. the education is to our week week? and wished we'd be a quiet >> just real quick, i think that garrow -- gerald makes -- >> my mother's fault. >> ask an excellent point that there's a values conversation happening here and it goes back to some degree by which you are quoting from detroit about conversations about facts and statistics in convincing people on that basis. that has been a nap help battle and there is closed and let the statistics do not necessarily on something that focuses to 87 g era sound analyses strong policies. there is ample evidence that the state is theirs and that if we were to rationalize our national immigration policies that we would see substantial increases in cumulative gdp that contrary to that and that goes to the question of cuba's population and nurse and their 60 million people and that's the usual and the economy. we spun on a conservative beaver tenure. and it's actually very similar to what the cato institute, center for american progress left-leaning progressive organization of the cato institute came and did their own independent analysis and came basically at the same conclusion, which would see removed these people and have a huge hole to the economy. give them the opportunity on an even playing field and increases across the board are significant. did you follow up? >> thank you for both of your responses. one thing extremely important to me. the economics of the renovation is what means the country is that it's extremely important to disseminate that information in a way that's easily accessible to the average joe. if i'm reading studies, i understand p. values and intervals and everything like that. the average joe doesn't understand, it's painless and not not going to make an educated but we want. just my response to daryl, that kind of education is necessary, but the statistics that i'm talking about are also valuable because of a state constitutional issue of violations of the 14th amendment. that is now at the conference is about. that needs to be brought to light. having good rigorous rigorous evidence of support because right now they're not even adequately reported that the city to even be able to test this. >> let me respond to that. you have to remember most of the groups are just the elect dry. i'm talking to the regular guy who goes to the voting booth. and i will tell you that the average american is not a good on standard deviations. they are not wrote that on confidence that theirs. they're not real good on reading scholarly analyses and reports. they're not real good at parsing whether this is a biased report with a certain perspective for this is truly object to is academic report. they are not good at that. i've had people in this room are important because i expect five representatives and their staff to be good at that sort of stuff. and that is where it's available. there's lots of it out there. the statistics on arizona come on what is happening because the economy are stark because these bills have heard us. not only that, what happens is people flee arizona and then they go to another state. and so is third in the tournament commerce clause issue constitutionally is but that is. if i start talking about the commerce clause and working versus sterling and the constitutional interpretation with people, their eyes glaze over because the average person who posed doesn't think at that level. very superficial. >> i'm just going to jump in here real quick. you're just looking for hard, statistical facts to support the fact that we need sensible and accretion reform. i'm going to add to it eddie aldridge said and of course this will always bring out some loser nonsense that provide abortion. you go to the cato institute and these guys will tell you it's an absolute fact it's not debatable that more american workers that enter the workforce especially in the unskilled level. that is a fact. number two is eddie aldrete pointed out to us it is at the level it takes for society to exist. and if they start coming from south of the border because they so happens the ones that have enough babies to keep this boost in that regard, then we've got a big, big problem. you tie that to the heart, cold fact this is wrote the wage 39 years. it is a fact. we are pushing 60 million babies. could've been american-born workers we have legally aborted because it a lot. we are here to talk about immigration, but let's leave that part of it. those people are not here and we have got a real crisis coming in this country if we don't turn our birthrate around. i think you have some cold, hard facts for convincing people why we need these immigrants. it's right there in just arithmetic. thank you. [applause] >> you know, i would just echo what she said, which is their is an important communication gap that needs to be filled and we've tried to do that in some respects by distilling, you know, some basic numbers. and it's worked to a certain extent the 144 million or 141 million in arizona and was conference cancellations. that has become standardized reporting. the $1.5 trillion in cumulative gdp that brittany mentioned before, which is what we did a year and a half ago, those numbers i think are important to get out there so it becomes part of the common dialog. but we have more work to do obviously we wouldn't be here today. did you want to anything, alex? >> ready to go onto the next question. >> okay. >> congressman scott garrett's office. this question is for alex. you talk about the cost to either fight how it makes an expense for businesses. can you talk a little more about the cost of government and business is, about you verify a? >> yeah, so as part of this entire process. all of these enforcement laws. he verifies the continuation started in 1986, part of the irca informer control act. according to a regulatory review done this year, employers spend annually 13.5 million hours dealing with the i-9 form. that is the symbol when we all fell out when we get employed in any kind of firm. i just sold them out not long ago. out of all of that time that private employers spend on that and employees every year it's about 18.5 million hours. that's a lot of hours based on a government form that doesn't really add much. when it comes to be verified, some of the main cause for the economic cost, specifically dealing with problems in the system. one of the problems the gao discovered when entering into the system is the system doesn't like hyphens. if you have a hyphen in your name, and he had to come back as a non-confirmations to stand are very much hyphen because of that. that disproportionately affects people who are hispanic because there's an increased number of hispanic names that have hyphens in them. part of the problem also has said he verifies does not function like a national i.d. system. it's got all the worst aspects come in and of the decent ones. i'm not in favor of national i.d. system. it's terrible across the board. the government database somewhere else. you don't have a piece of paper that says my name is alex nowrasteh, and this is where you work. if the guy behind computer screens saying sorry your information doesn't match. this is no good. if your information to the magic is something called a tentative nonconfirmation which means have a certain amount of time to prove to the employer you are legally allowed to work in the united states. the thing is to correct a lot of the errors in the government system in databases, the government won't release a lot of the information without something called a privacy act request because the information is personal and takes a lot of time to get to that. the average amount of time is 104 days. you have 120 days max meant to solve a tentative nonconfirmation. that doesn't leave a lot of time or space for somebody to run through them he verifies system to actually solve the problem and make sure they are legal. if you are to take a look at the bureaucratic steps for solving the verify problems, i wish i brought this, but the gao documents from the 2010th study of the verify basically pulls a full page of areas. nice little diagrams there is a people talking other bureaucrats, other systems and information from the government and going back to the employer. quite frankly when we have an unemployment rate, the economy is suffering. the last thing you want to do is make the system more complicated than it is to hire somebody. so there's a lot of states now that make it mandatory to high year and what were going to see is what we have seen in arizona, which is more hires going into the black market and not a check to the system. instead of having more people hired legally, will have a lot of people hired in the black market in a cash only economy, which is the intended effects of the law. >> construction worker coming to my house a few months ago, years ago. he worked on my house. there was no work that i needed. i'm preserving the brazilian rainforest for having 600 feet of brazilian mahogany in my house on the floor. he was repairing some of that. he says to me, can you pay me cash? i said why? he says well, i have a day job and i pay enough in taxes already. now i'm one of the less than half who pays taxes in america today. so that upset me immensely. but give them a check and a sentiment 1099 because the skies on the black market wanting cash. i took a cab here today. i want to pay with a credit card because we only take cash. i said why? he says well it's easier to keep track of. i said yeah right. i took a cab and all of a sudden guy said can you pay me cash? i said no, credit card. he said well, i have to report it is what he said. i said take my credit card. there's a black art in america. and part of this is a lot of employers and i'm an employer. i have lots of employees. we hired them. we just 1090 nines them. we put them on so we walk around this blog. and i wonder how many people do that. my criminal for that? and that we work to make sure we can verify. we heard one hispanic lady who is 18, did not. she worked at our office as a receptionist because we needed a bilingual person and i walked in one morning and she was crying. she got deportation papers. and so i walked by her, tapped my office manager. i hired an immigration attorney on my own dime to solve a problem that was a bureaucratic snafu and got her so she was brought over when she was two years old by her mother. she was an american as much as anyone was here, but she didn't the papers that her mother had a green card. her paper work was not good in their going to throw her back to mexico where she never lived. the expensive as for firmware into firmware into the thousands and thousands of dollars and i would multiply that and it's outrageous that the government is doing to me. >> i want to make a point on this referring to the black market. this is a really big issue with the enforcement only legislation, which is basically tracked with what russell pearce wanted. when we pass enforcement only loss, which i would put the verify under that category, those laws only apply to employers who admit to having employees and employers that have followed the law by completing the i. nine rd got in a match in taxes in most cases provided workers compensation, some health insurance one k. et cetera. when we have -- we apply either side for any kind we have a rate, and i-9 audit, what happens is that those employees who i-9 records don't match, they don't have either -- they barred a social security number or the fake number minutes at the flea market or whether they are, for whatever reason they don't give the country. they move away from the employer who has been to.and in matching taxes then move to what alex is referring to is the black market. basically they move to 1090 nines for a. they go on work where people will bring them up in a pickup truck, hand them the tool and it clearly employees at irs rules, but will be treated and paid within i-9. they're not independent contract areas like you are describing an independent contractor remodeling your house. at the worker who gets dusted off for the job because of enforcement only laws. we shoot ourselves in the foot and a friend of them to payrolls where we are no longer collecting payroll taxes. that is the number one reason from a financial standpoint that immigration reform would be a boom to her payroll tax revenue without any tax revenues. >> sorry for the interruption. >> i think we have time for just one quick last question. >> i wanted to see if any of you could touch a little on the possible effects of s.b. 1070, if it by the supreme court is going to have arizona's neighboring states such as to mexico. alex, maybe you can catch on the economic effects if you have any data on that. >> i have a little data on the effects of new mexico. new mexico is very better than most other states in the union during the great recession for a number of reasons. one of the main reasons as he has seen a lot of people have left arizona as a response to last have gone to neighboring states, utah, nevada, new mexico, texas because texas is better policy across the board that lower taxes, no state income tax. so what you see is an increasing number of consumers, entrepreneurs and workers who go to these days. what's interesting is the studies of entrepreneurship from the immigrants regardless of status are more than twice as likely to start a business as our nativeborn and hispanics are almost twice as likely to start a business than non-hispanic americans. what you see in places where the economy is doing better than places like arizona, where is doing worse as more business creation. more job creation for business and immigrants are driving force in job job creation, both of themselves starting businesses and providing a lot of the other support that businesses need to be able to get started. so i think you'll see an increase in economic growth in states that receive more immigrants as a result of them going there and because the states are uttered in arizona, so that if witchel and i've seen. as a result of public services and problems like that, texas doesn't have a large welfare state compared to other states like california, for instance. and the taxes are lower there as a result. if you see temporary families in texas it's about a fourth of the amount that it is in california. immigrants aren't going to states with high welfare state through the codices like texas that have low welfare states, most taxes and economic growth and seem to add to that. >> let me just add to that. the amicus brief by side on this issue deals with that precise issue and there's lots of statistics and vacation for some of alex's work in that brief periods to get a copy of that brief. it is replete with citations and statistics on that. >> when enforcement through attrition becomes acceptable, where does it stop? who is the next group? when senator pearce was building a coalition for s.b. 1070 can be granted what to need, what i call a anti-women, anti-gay legislators, which is now coming up, that they signed on with s.b. 1072 come through the next session and of course he was voted out of office. but not just the economic issues, the moral issues i think we can anticipate anti-gay and anti-muslim legislation coming down the road. >> thanks for bring it back to the moral issues. >> can i say when that didn't quite >> sure. thank you for the work you're doing bless you and your passionate phd work. i want to say that i know when the framework of this discussion, taca academic angst in demographics and the berger issue is of concern. i just want to say the heart of this to me and the one very brief story, a group of students come to phd candidates from colorado went down to the migrant trail, which as you probably know as the trail of dead migrants through mexico tours the u.s. border has been locked in a long time. they might have come from guatemala or central america -- i mean, central mexico. they had been lacking for a long time and students from colorado win out because people go and assist them. the people haven't eaten, don't have water, decent clothes. the people in the mexican side of the border offers support. this group didn't speak spanish very well. this group of migrants working through the desert and said that if enough, call me that, all quiet and a senior group of white people yelled at them rebranding away. so the student said again, spann said [speaking in spanish] and the groups of migrants came back to the desert and said we are sorry, we don't have much water, we don't have much clothing. we don't have much to did we don't have much been the same. but what we have, we will share with you. and on the other side of the border, it is illegal to offer carrier beyond these questions of democrats six hamburgers as what about our hearts? and does our heart matter in your formulation as staffers of public policy? thank you. >> were going to have to stop there. thanks. >> president obama arrived in afghanistan today on a surprise visit to sunny postwar agreement with president hamid karzai. .. >> here on c-span2. >> between 1971 and 1973 president richard nixon secretly recorded nearly 4,000 hours of phone calls and meetings. >> always agree on the little things, and then you hold on the big one. i mean, hell, i've done this so often in many conversations with people, i say, well, we'll concede that and make them all feel good, but then don't give them the big one. >> hear more of the nixon tapes including discussions with future presidents, key white house advisers and intelligence agency heads saturdays at 6 p.m. eastern. in washington, d.c., listen at 90.1 fm and at c-span radio.org. ♪ >> this week on "q&a" author naomi schaefer riley discusses her latest book, the faculty lounges. c-span: naomi schaefer riley, on page 11 of your preface, you say it's a con game made to suit the interests of the tenured faculty who would prefer to write obscure tomes rather than teach broad introductory classes to freshmen. what's the con game? >> guest: well, it occurred to me in researching this book that the professors have very different interests than students and parents do in higher education. what gets rewarded if you are a professor is publication, publication and more publication. and it's actually not in your imagination, in case you've read an academic book lately. it's actually supposed to be obscure because you as an academic have to, basically, blaze new trails, you have to always be saying something new. so, for instance, there were a hundred new academic works published on shakespeare. now, love shakespeare, studied shakespeare in college, but i have to wonder whether it's actually worth a professor's time to be writing new, kind of, you know, theoretical twists on shakespeare as opposed to teaching a broad introductory class on hamlet. c-span: where did this all start, the need to publish? >> guest: well, it started with the progressives in the 1920s. there was this whole idea of a research university which came over from germany and sort of planted itself on our shores in the early part of the 20th century. and it was really sort of kind of two things, one was with the scientific research, you know, especially in the physical and biological sciences people really were blazing new trails. and, you know, there was a lot of new ground broken. and the whole idea was that nobody really could judge the quality of the work unless you were really, truly familiar with this sort of new, complex scientific system that was being imemployeed. and, you know, i think i get that on some level. but what happened was the standard for the physical sciences then shifted over into the social sciences and the humanities. and suddenly those professors always had to be saying something new, and those professors could only be judged, again, by people inside their field. there was also another progressive idea which was that the professors were supposed to sort of form the experts in society, they were supposed to be what we now call the public intellectuals, and they were supposed to be kind of adding to society's store of knowledge. and again, i think this is what one result that you see of this today is that professors kind of stand apart, and we are not supposed to, you know, in the broader society kind of really question what it is that they're doing when they're engaged in their research. c-span: the title of your book is "the faculty lounges and other reasons why you won't get the college education you paid for." where'd you get the idea, and why is this necessary now, this book? >> guest: well, you know, higher education right now i think we're having kind of a crisis of confidence. if you look at the surveys. you know, generally, americans love higher education. i talked to one pollster who said, you know, it's like mom and apple pie. and, um, but i think right now the costs have gotten to the point where people are really questioning higher education's value. and so in my opinion this is actually a very good time to look at kind of where we've come and not to say that we need to scrap the whole system or that college education isn't worth it, but to say that we do need to build more accountability into the system. and i think that for students and parents who are paying those tuition bills, we really need to have a good sense of what kind of undergraduate education they're getting. c-span: how many schools are there in the united states that grant four-year degrees? >> guest: about five or six thousand accredited colleges. and so, you know, it's obviously hard to write kind of a broad book that kind of covers what all of them are doing because they're engaged in many kinds of acttivities, you know, some of them consider themselves more vocational, some consider themselves liberal arts, some want to be research universities. but there are some things that they seem to have in common, and one of them is this sort of drive to research. i was very surprised to find that even at community colleges in so-called teaching universities, you know, not research universities the drive to publish is what is always rewarded at these schools. c-span: what kind of a home did you grow up in? >> guest: an academic one, of course. [laughter] c-span: where was it? >> in massachusetts. my parents met at the university of chicago, and now my sister has her ph.d., so i'm the last member of her family without one. that will tell you something. but, i mean, i grew up very -- with a deep sense that higher education can be extraordinarily worthwhile and that it can really, it can change your character, it can change your life, it can change your career, it can change everything if it's done right. um, but what i worry about is that the many of the faculty -- and it's not just, you know, the faculty individually making decisions, but the incentives that are put in place in the system, i think, are what are undermining the undergraduate education. c-span: where did you get your degree? >> guest: i got my degree from harvard. c-span: in what? >> guest: english and government. c-span: was it worth the money? >> guest: well, you'd have to ask my parents, it was their money. [laughter] no, i think it was. but i had an advantage. i mean, i had parents who actually were insiders and who were able to advise me about what kind of classes to take and which professors were actually interested in teaching. and, you know, and i knew what to look for. and i really think so few people have that going into college. and, you know, their parents are just thinking, well, this is the next logical step. i want, you know, junior to be a member of the middle class or the upper middle class, and i want them to have a good job, and i want them to, you know, get something out of college educationally, so let's just send them here because this is what "u.s. news & world report" says. c-span: where do can your parents teach? >> guest: my father teaches at holy cross in worcester, and my mother doesn't teach anymore. she taught at a number of colleges before she founded her own think tank in worcester. c-span: so what do they think of this book? >> guest: well, you know, i joke with my father. the subtitle of the book could have been confessions of an ungrateful child. but i think he takes some of the criticisms of the book very seriously, and i think, you know, he feels as if, you know, being at a small liberal arts college some of the criticisms are not as applicable. but, you know, in a great deal of ways, you know, small liberal arts colleges are not really representative of what most americans experience in higher education. but i always emphasize to him that this, that the finding -- one of, i think, the most important things that i learned researching the book was that for every additional hour a professor spends in the classroom, he or she will get paid less. and that was true not only at the big state universities, but it was true at small liberal arts colleges. c-span: wait a minute, let's go back on that statistic. what are you really saying? that if you're a teacher and you're in the classroom, the more you spend in there, the less you make? >> guest: basically, anytime spent in the classroom is time not spent writing. so depending how you divide your time, that will determine what level you will reach. c-span: who are they writing for? >> guest: each other. i mean, i don't know, you know, when the last time, you know, you picked up kind of an academic publication was, but even harvard university press, i think, recently said that the average circulation of one of their, you know, one of their academic publications is 250 books. so when you consider that a lot of those books are actually just purchased automatically by libraries and, you know, that's harvard university press. when you think about all of the smaller university presses out there that are having a circulation, even smaller than that, and by the way, the expense of those books, you know, academic librarians complain about this to me. but, you know, students complain too. so to me, you know, somebody wrote a paper recently where they said that the academic publication industry was driven by the producers and not the consumers. and, you know, i think that says it all. c-span: was this book your idea or the publisher's idea? >> guest: it was my idea. c-span: i ivan rd now owned by roman and littlefield? >> guest: yeah. c-span: define the word -- well, not define it, but explain how someone gets tenure, and what is it? >> guest: so, um, when you go to a university, you could be offered something called a tenure track position. about, i don't know, maybe 40-50% of academic positions out there are either tenure or tenure track now. so if your on the tenure track, what happens is when you arrive at the university, they start a clock. and the clock goes for about seven years although at some universities it's lengthened, i think the university of michigan recently electionenned it to ten years. and during that time you have to show why the university should keep you on permanently. and what you do during that time the university, most universities claim that three things matter. what matters is your publication record, your teaching record and your service to the university. so serving on a variety of committees. they call this in academia, they call in the three-legged stool of academia. so during that time which, you know, by the way, coincides with a lot of other things in your life. people have pointed out, for instance, usually this is sort of between 30 and 40, say, when women are maybe wanting to have children, start families, do other things. this is when kind of the most intensive part of your career is going on, when it's kind of an all or nothing. so at the end of that clock, a committee -- usually, basically, of your own department members -- will look at that, at your record and say up or down. c-span: so your fellow professors are doing this. >> guest: exactly. and most of them in your own discipline. it's not like some professor from another department who doesn't know you. it will be the people who you have basically been with every day for the last seven or eight years will be sitting in judgment of you. c-span: secret judgment? >> guest: oh, absolutely. the committees are not made public. and there was an interesting piece by a professor at tufts about how he did not get tenure at the university of chicago a number of years oog. and he was talking about kind of -- and his wife actually even contributed to the piece, too, about how it feels to be judged in this way by the people who you thought were closest to you and who you had worked with collegially, and they go into this back room and decide about your future. so what happens at that vote, the tenure vote is you either get to stay on permanently, or you get out. c-span: immediately? >> guest: there's no, you know, by the following academic year. there's no in between. it's not like, oh, well, we'll give you another couple years and see if your publication record improves, or why don't you just stay on on a part-time or temporary basis. c-span: what's the percentage of professors teaching on the tenure track that get tenure? >> guest: i'm not sure. i mean, i think what -- you know, if you're on a tenure track, that means that they have a tenured position available at some point in the future. so some universities have started to cut down on the number of tenure tracks, that is, when somebody retires, they will say, okay, that's going to be, now, an adjunct position which we should get to in a minute. but, you know, getting turned down for tenure is a very, is a very common thing, and i think a lot of people feel like they've been led on, like they do this certain number of years at a university, and once you've been turned down for tenure at one university, it's very hard to start from scratch at a new university. c-span: do they give you any warning during those seven years that you're not doing well? >> guest: some universities give you updates along the way. but, again, i mean, it's a very, it's a very personally-driven process. and, you know, some schools grade you based on your collegiality which, you know, sort of -- [laughter] how well you play with others which i think is kind of insulting to a professional. but they also, you know, they'll give you some sense, you know, in terms of how big your stack of publications is, you know, how they think you're doing relative to other candidates. but from what i've read and be a lot of people find it to be a surprise if they don't get tenure. c-span: is there any appeal process if you did not get tenure? >> guest: some schools have them. i mean, you know, and, again, there's a lot of -- there's not a lot of transparency in the process. and i think that that should bother more people than it does, particularly t universities. -- at universities. so some schools do kind of have this back alley way of find being your way into maybe, you know, the president's office or the provost's office and saying you want to be reconsidered, and maybe then the provost will suggest to the department it's time to reconsider. but a lot of them it's really hard to discern. c-span: help me out here, the professors don't have a transparent process, but if you listen to what comes out of a professor over years, they're demanding all the time of openness. >> guest: yeah, well, you know, the professor is not among the more self-reflective bodies, in my opinion, and i think there's not a lot of examination of what goes on. you know, they want to talk about, you know, bioethics, they want to talk about, you know, government ethics, but there's not a lot of talk about what goes on in the academy and the ethics of that. so i think the lack of transparency in the tenure process is one of the biggest problems that i see there. c-span: if you were to point out the person that you know that hates in this book the most, who would it be? >> guest: boy. let's see. well, i think, um, the head of the american association of university professors was asked to comment on my book by inside higher ed a few weeks ago, and i think he said that it left him speechless. so i was happy to take credit for that. but i think he was, he was very, very angry and particularly, i think, what most professors disagree with in that book is my argument about tenure's connection to academic freedom. that's sort of the first thing that comes out of professors' mouths when you say why do you need tenure, and they will automatically without thinking just say, oh, to protect academic freedom. so i have a chapter in there, it's the first chapter, and i talk about, you know, what is academic freedom, and why does it need protecting? one of the arguments that i make is about the rise of vocational education. you know, tenure was originally this idea that professors should be able to be protected when they go out on a limb and say something controversial about their discipline. you know, and be i say, okay, well, maybe on the hard gins you can see how -- margins you can see how this would be important in the case of a couple of humanities professors, maybe cutting-edge physical science professors, but, you know, professors of business administration, and then i sort of also talk about, you know, some of the new disciplines that have come up. you know, security studies. there are, there are basically professors of cooking who now have, you know, professors of nutritional studies who have tenure now. and, you know, when pressed, you know, someone at the aup or a professor who is, you know, towing the party line will say, oh, well, we need someone with tenure and security studies so they can, you know, talk about immigration even though it's controversial. and someone in nutritional studies needs to be able to say something controversial about obesity. you know, this could go on indefinitely. there's no limit to the number of controversial things that need protection. but, you know, in my opinion i think the, you know, the bounds of academic freedom have just gotten, have just been pushed too far. c-span: you wrote the american people themselves are directly responsible for what she sees as the oppressive atmosphere on campus, and you're referring back to a woman named bernstein. what are you talking about there? why are the american people responsible? >> guest: so elizabeth bernstein is vice president at the ford foundation. and i went to hear her talk at a conference on academic freedom in new york a couple of years ago. and the ford foundation gives so much money to higher december that, you know, the audience is enthralled to hear elizabeth bernstein talk. and she began to list the threats that she saw in the american academy to academic freedom, and she listed, oh, you know, conservative religious groups, she listed anti-evolution groups, she listed republicans. i mean, it just sort of went on and on. but at the end she said one of the biggest problems she saw were cable news networks like fox, for instance. that were telling the american people about professors, you know, um, like the man at columbia who wished upon, you know, america a million mogadishus or, you know, or telling people about ward churchill, telling people that the outrages of american universities. and to her, you know, the problem was not the outrages, the problem was now the american public was interested in the outrages. and, you know, the idea, again, we get back to this question about, you know, you think that university professors and the people who are interested in higher education want transparency, you think that's sort of one of their buzz words. but, no, they look at transparency as, oh, now all these, you know, sort of the little people are now looking over my shoulder, and they couldn't possibly understand the scholarship that i'm engaged in. c-span: you in the next paragraph say just to be clear, was a representative of the ford foundation, the sugar daddy of modern -- is that what they are, a liberal foundation? >> guest: oh, sure. i mean, ford foundation, basically, was responsible for sort of, you know, funding the great society before it was, you know, funded by the government. i mean, and even now if you look on campus, i mean, what are the programs the ford foundation funds? they fund the difficult dialogues program where as a college they will give you, if you're a college administration, they will give you $100,000 to promote dialogues on your campus about race, about sexual orientation, about all these things. but for ford, you know, the answers are already clear. i mean, you know, the problem with race is that, you know, minorities are oppressed, and they're still oppressed to this day, and they're still suffering from the legacies of slavery, you know? sexual or yenations are all good, it's just a matter of choice. they're not dialogues, they're just, you know, sort of one-sided propaganda campaigns. c-span: where do you come from on the political scale? >> guest: on the right. c-span: how did you get there? >> guest: i came by it honestly. i mean, i think my parents both qualify themselves as conservatives. although, you know, i think that i've thought about it enough too. i mean, i used to work for "the wall street journal" editorial page, and i largely agree with that sort of philosophy on free markets, you know, economically, but i'm also something of a social conservative too. c-span: your father teaches at holy cross. how does a conservative, i mean, the implication is that there aren't many conservatives in the academia. >> guest: there are not. it's, you know, one of the things that people like to say about tenure, and i interviewed a lot of conservatives who defended tenure because they said, look, i would lose my job tomorrow if i didn't have tenure. um, but the idea that tenure has really protected dissent on campus is one that i think we have had enough experience with to examine a little bit more carefully. you know, just to give you an example, you know, when barack obama was running in the last election, american professors gave eight times as much money to him as to john mccain. now, obviously, john mccain lost, but it wasn't quite by that margin. but, you know, it's not just politically that dissent is not protected. i mean, i talk to people who were familiar with arguments in physics departments, and they said, look, if you come out with the long view of string theory, i mean, you will also be sort of pushed out. it's not an environment that tolerates dissent of any sort very well. um, there was a story recently about a professor at ohio university who actually got tenure. he was, um, he had been a journalist before, and he got tenure. and then he wrote a piece for the chronicle about how he'd resolve to act from now on now that he has tenure. and basically he just said, uh, i'm done. i'm not going to rock the boat anymore, i'm not going to stand up anymore. you know, it was just like someone who had been beaten down. and i think, you know, that process we were talking about, that 7-10 year process where you're with these people, you know, every day, and you're trying so hard to please them because you want that job for life. i think what it just promotes is an atmosphere in which everyone keeps their head down and their mouth shut. c-span: have you ever run into anybody who's conservative in a college atmosphere and who keeps their head down on their politics until they get tenure? >> guest: you know, i guess i sort of hear these stories apocryphally. you know, this was sort of the famous line of my former professor, harvey mansfield, who sort of jokingly advises people who ask his advice to, first, get tenure and then hoist the jolly roger. c-span: by the way, he sat right there one day and said he was only one of six professors in harvard. >> guest: who was a conservative? c-span: who was a conservative, yeah. i'm sorry, who was a conservative. >> guest: i'd probably come to a similar mentality. [laughter] yeah, i think -- but it is a rare person, i think, who can control themselves for that long and then suddenly at the age of 40, basically, wake up and start speaking their mind. i mean, it's -- if you can do it, if you can kind of sneak under the radar for that long, fool people into thinking, you know, this is somebody who will really get along well with, you know, the liberal atmosphere at the university and then all of a sudden wake up and say, aha, i have tenure, now i'm going to out myself to everyone, you know, good for you. but i don't know how many of us can, a, sort of keep it to ourselves for that long or, b, once we have, you know, really want to offend all the people that we've befriended. c-span: i know this is off the subject of the book, but you went to harvard, and you're a conservative, and there aren't many conservatives teaching at harvard, but they didn't change your mind. >> guest: no. i mean, look, i don't -- i mean, harvey was talking about political conservative. i took a number of apolitical classes at harvard. like i said, first of all, i was a major in accomplish and government, so -- english and government, so i took government classes with harvey mansfield, peter berkovitz and a couple of other prores who i think would classify themselves as conservative. but what i really liked about the professors that i had was that they left politics at the door. i mean, i took classes on shakespeare and plato and even harvey mansfield who was a well known conservative outside of the classroom, we didn't sit around discussing republican talking points or something like that. in fact, i remember he, you know, his last sort of popular book was on manliness. and i took a graduate seminar with him, i think it was my senior year. and a number of kind of let's just call them radical feminists showed up. i think they wanted to really disrupt the class and, you know, get their views heard and protest, you know, the idea that we would even have such a class. and, you know, harvey mansfield sits down, and he's a very sort of mild-mannered guy, and he just sort of starts talking about plato and courage. [laughter] and i think these women were just like where do we go from here, you know? i thought we were going to talk about gloria steinem, or i thought we were going to talk about some sexist pig that we can start harassing. and i think my point is that, um, you know, so many of the professors that i had i appreciated the fact that their politics were not part of the curriculum. c-span: you say that in 1994 that there was, they could not restrict the age, well, at which you had to retire. i mean, we used to have to retire in this country at 65. it was originally passed back in the 80s schools got to, what, '94 when -- >> guest: yeah. c-span: what has that done to the universities? >> guest: well, it's exacerbated the tenure problem. in fact, many people who say to me why get rid of tenure, why not just reinstitute mandatory retirement? what you have on campus now is a lot of aging baby boomer professors who are not really doing their job very well, and they're just kind of waiting until their 401(k) gets big enough that they feel comfortable retiring, and every time the market takes a hit they're like, ah, just one more year, i'll stick it out. so it's a problem, and i certainly see how mandatory retirement could solve that in some sense. but i, i'm very reluctant to go that way. i mean, i had some great professors who were 70 years old. i think -- i shouldn't say but, certainly, harvey mansfield is well over 70 now, and many of my professors that i had at the time were certainly well over 65. they had great experience teaching, and they happened to be good teachers after that. so why should we arbitrarily kick them out just because some people at that age decide that they're not going to do their job anymore? c-span: if i had tenure at a school, does it really mean that they couldn't fire me? >> guest: it's technically not supposed to mean that, but i have to say i have talked to so many administrators who have just said it is never -- it is almost never worth it to fight that battle. i mean, we mentioned ward churchill a minute ago. when i started this book, i kind of resolved, okay, i'm not going to mention ward churchill on every page. he's kind of an outlier, you know, and people are sick of him, and by the time the book comes out, he'll be old news. the week the book was published, the colorado state supreme court decided to hear his case. this is a man who six years, i think, after he was fired is still fighting this battle. so you're, you know, the president of colorado university, hank brown -- who, by the way, has stepped down. he must wake up every morning and think, my god, he will not give up. it cost the university so much money to get rid of these people even when they have a great case. play jarrism, shoddy scholarship, there was so much wrong, yet it will continue going through the courts. the lesson identify gotten if -- i've gotten if you look at inside higher ed or one of these industry nude letter -- newsletters, they periodically run advice on how administrators can gently push these people out. and one of them i was sort of shocked to read was how an administrator can say to a professor for whom it's time to go, well, you can still teach one class, okay? so one guy wrote in saying that they had tried this at his school, you know, so they had hired a new, young professor, dynamic professor to take the place of this aging professor that everybody agreed was incompetent. and then they had this fight over who was going to teach this one class because the professor -- well, you promised i could stay. and so the compromise was they would each teach a section of the class. the article, by the way, was called "you'll pry this course from my cold, dead hands." so they have this fight over, you know, who is going to teach the class. they each decide they're going to teach half of it, and there's no mention in this article about how half the students taking this class are going to get someone who's utterly incompetent. to me it demonstrated that tenure was just, it has nothing to do with the student. i mean, the teaching is the last thing on these administrators' and faculties' minds. c-span: define the differences a state school versus a private school. what's different if you go to one or the other? >> guest: as a student or as -- c-span: yeah, i mean, what are some of the overall differences about unions and tenure and costs? >> guest: right. so the tenure system is not much different. you know, people go back and be forth, you know, between public and private universities, and they largely have the same system. it's still the seven years. there are sort of, there's some different rules about what is protected speech and different kinds of senses of academic freedom because with the public schools the courts are more involved because it's taxpayer-funded. so the tenure system is not much different. unions are certainly somewhat different, but -- so what happened was in 1990, i think, there was a ruling by the supreme court that said, um, if private universities did not want to recognize faculty unions, they did not have to. the ruling was called the nlrb v. seen baa university, and it says faculty are like management, and so they cannot -- they need not be recognized as a union. public university campuses, unionization, public university campuses is one of the fastest-growing areas of organized labor right now in the country. you have a situation where the unions have recognized that, obviously, the manufacturing base is shrinking and the private union base is shrinking. so public sector white collar jobs are where the growth is going to happen. so you saw, actually, some of this. i think people were a little bit surprised during the fight about wisconsin a few months ago to hear that there actually were unions of professors at the university of wisconsin. i mean, unions are generally something we think of as, you know, for people who are, you know, in jobs where they can really be exploited, where maybe they're not -- you know, people are not as educated. and yet it's really growing in higher education. so, um, that's one big difference. and i think you're seeing, you know, the effects of that. i mean, unions at the bargaining table will mean, you know, less distinctions in terms of merit pay, you know, it will, you know, pay will be based more on, you know, your level of seniority. and a lot of professors and administrators i talk to will say unions have been a force for mediocrity on public university campuses. c-span: so i go to -- i guess i have to have a ph.d. if i'm going to get tenure. >> guest: yeah. c-span: which takes me how many years? >> guest: well, that's lengthening too. you know, it used to be five, six, seven years. now the median time to obtain a ph.d. in english is 11 years. c-span: for just the ph.d. time? what do you do, teach while you're going through -- >> guest: you do, but it's not because you're working on your ph.d. part time that it takes 11 years. in fact, louis mannon had a piece in harvard magazine a few months ago where he speculated one of the reasons it's taking people so long to get their ph.d. is this mandate to find some new twist on things people have written about so many thousands of times that, you know, you'll finally find the topic, and then you'll realize that somebody else, oh, my gosh, has written that five years ago in some obscure journal, and you'll have to start from scratch. c-span: so can you characterize how much money people make that are professors? >> guest: not a lot. um, you know, this is, you know, a full professor, you know, it -- c-span: full professor means you're at the top of your game. >> guest: yes. you have tenure, and you can't really be promoted anymore. so you're probably, by the time you're full professor, let's say you're late 40s maybe. and you, you know, you could be making depending on the university, depending on the area 60, 70, $80,000. i mean, the salaries of professors don't outrage me. i don't think that's the problem. c-span: that's really not why i asked, because i wanted to go on and they have tenure, and they're full professors, and they make let's just pick $70,000, how much actual teaching do they have to do? >> guest: well, let's start with the public research universities. c-span: you've got tenure now, you don't have to -- >> guest: sure. c-span: you're not on the -- you're home free. >> guest: at a research university, you could be teaching probably as little as two classes a semester. c-span: three hours a week each? >> guest: pretty much. c-span: six hours in the classroom a week? >> guest: yeah. the assumption is you will be spending approximately half of your time doing research. so if you ask a state legislator, for instance, oh, how much are you subsidizing research at your state university, and they'll say, well, it's not that much, the answer is a lot because you are paying people a full salary to only be teaching half the time. c-span: do you by chance know who gets the most amount of money of all the universities for research? >> guest: of all the universities for research? oh, you mean of -- c-span: federal grants? >> guest: no, i don't. there are about 100 universities in america that make up something called the -- are part of a club called the american association of universities, and the only way you get into that very prestigious club is by having, is by getting a lot of federal grant money. and there was, actually, a couple schools actually recently got kicked out of it. well, syracuse decided it was about to get kicked out, so they left voluntarily, and i think the university of nebraska, actually, just left too. what was interesting to me about the syracuse case was that they were actually getting some private money for some of the research they were doing, but that doesn't count for the aau. you have to be getting federal money. so the prestige is all wrapped up in this must be, you know, public government funds. so at a time when we are trying to figure out how to cut back and how to reduce the cost of higher education, they're thinking how can we get more out of federal dollars? c-span: can they make money outside the classroom, outside the university when they are tenured professors making $70,000 a year and teaching two classes a semester? >> guest: sure, sure. c-span: how much of their time -- in other words, who holds them accountable for research? >> guest: you mean, could they be making money doing research, like, for a private company? c-span: well, in other words, if you're -- again, i've been in school for 15 years, i've got a principle professorship, i'm teaching my two classes, but i really find myself capable of making lots of money over here, and i don't want to do research for the school. can you just blow the school off? >> guest: um, it would be, it would be hard to just blow the school off. i mean, usually what happens with research, with, you know, real research grants is that the application has to come from a university. so you're applying as part of a university program. it's hard for one single professor to just go off on his own and say i want to get research from the national science -- funding from the national science foundation by myself. but it would be a different story, for instance, if you have, like, a drug company. and this is where some of the controversy has happened recently. where you have professors who have, you know, kind of reached their own private agreement either with biotech companies or drug companies where they're making money, and it's possible that their research is actually in some ways coming into conflict with their job. because the private companies, obviously, have particular ideas about, you know, the domain that they're in and the, and who owns this information. whereas the university, again, this comes back a little bit to the transparency question. the university is supposed to be this free exchange of ideas, and everything is out in the open, and we're all supposed to be able to, you know, understand what's going on in these labs. so a professor, you know, there was actually recently a story about i think it was in "the wall street journal" about a student who had turned in a paper, maybe it had to do with biotech or computer coding or something like that, and the student was actually working for the company and felt like he couldn't complete this assignment without somehow violating his contract with this outside company. so there's a lot of, i think, um, conflicts of interest that are going on. c-span: what's an adjunct professor? >> guest: so an adjunct professor is by very definition a temporary position. now, there are adjuncts who could be teaching for 25 years in the same place, but their contract renewals generally happen on a year to-year or even a semester-to-semester basis. they don't get tenure, and they are not on the tenure track, so they will never come up for tenure. c-span: and they don't have to have a ph.d., i assume. >> guest: they don't have to, no. many of them do. so what happens is adjuncts actually do the bulk of the teaching. because -- c-span: in all the schools? >> guest: in -- not in all schools, but in large universities where you have a senior tenured professor who kind of opts out of life in the classroom after a certain point except maybe graduate seminars or perhaps upper level undergraduate seminars. so the adjuncts are sort of, basically, brought in to kind of teach, you know, political science 101 -- c-span: hey, how much are they paid? >> guest: very little. in some cases significantly less than minimum wage. their working conditions are -- there was a film that i watched when i was doing research that actually compared them to migrant workers. and i have to say i thought the comparison might have gone a little bit far, but it's pretty disturbing. i mean, they find out the week before the semester begins whether they have a job at all, they get paid next to nothing -- c-span: yeah, but give me an idea what they get paid. >> guest: so there was a professor that i talked to at cal state fullerton who, i think, was getting paid maybe a thousand dollars a month or $1200 a month. c-span: you had one in here that was getting $549 a month. >> guest: yeah, yeah. c-span: is that over a 14-week -- >> guest: they're paid by the class. c-span: in other words, their class is 14 week toss a term, three hours a week, what is that, 42 hours? >> guest: right. well, so it's not just the -- well, what you have to consider is not just the teaching they're doing, but they're also responsible for all the grading of papers and things like that, so there are definitely activities outside the classroom. and, you know, one woman who i talked to said, well, i could have 200 kids in a class, they'd assign me one graduate student, you know, who would be with me two or three hours a week. so what do you do with that? do you -- you're going to personally grade, you know, 200 papers three times a semester? a friend of mine actually teaches at a large university in pennsylvania, and she's been told by her department to stop assigning papers altogether. or even exams that involve essays. everything should just be multiple choice now. c-span: why? >> guest: because it takes too much work. because they don't have the labor available, they say, in order to grade those papers, so just do can it multiple choice. c-span: so on a percentage basis nationwide in state universities, how -- what's the percent of people that are adjunct professors in a classroom? >> guest: i think it's like 60% now. c-span: what about a place like harvard? that's private. >> guest: it's not a private/public thing. it has a lot to do with the size of the university and to what extent they expect the senior people to be doing research and not teaching. so i'm not sure what the percentage is at harvard. c-span: what does your dad teach? >> guest: political science. c-span: how many courses a year does he teach? >> guest: i think he teaches six courses a year? three in the fall, three in the spring. c-span: and why is it at holy cross, which is a jesuit school, why does he get three, and if he was at harvard, he might have only one? >> guest: because harvard is a research university. c-span: and holy cross is not. >> guest: right. holy cross is considered a liberal arts college, a teaching college. c-span: you mentioned you were at "the wall street journal" editorial page. when did you work there? >> guest: i left about a year and a half ago, and i worked there for about five years. c-span: what'd you do? >> guest: i edited culture columns and religion columns, and i wrote about higher education. c-span: how did you get that job? >> guest: let's see. well, i worked at other magazines. i think i worked at "commentary magazine," i interned at the journal, actually, right out of college, and i wrote another book prior to joining the journal which was about religious colleges in america called "god on the quad." c-span: and why did you do that? >> guest: why did i write about -- c-span: where'd you get the interest in "god on the quad"? >> guest: well, i visited two schools that had just opened up, one was called patrick henry, and i wrote a piece in a magazine and wanted to look into why these schools were growing so rapidly. c-span: patrick henry's right down in virginia. where's the other? is that down in florida? >> guest: when i visited, it was in ann arbor, michigan. c-span: what did you find out about those two schools that you find most interesting? >> guest: they were attracting some extremely smart kids even though at the time neither one of them was accredited yet, and they were attracting kids who did not want to kind of just stay in a religious kind of ghetto, but really kind of bring their ideas to bear in a world of public policy or law or any number of other fields. c-span: and commentary, how long were you there? >> guest: two years. c-span: that's norman pa hortsz publication? >> guest: yeah. c-span: what did you take away are that experience? >> guest: well, i was in charge of editing the letter there is which i don't know how familiar you are with commentary, but it's sort of an extensive letter section. you know, i became familiar with the intricate says of a lot of debates about foreign policy and domestic politics, and i also kind of became more familiar with the way a magazine works and how it actually gets produced. c-span: going back to this book, "the faculty lounges and other reasons why you won't get the college education you paid for," who thought of that title? >> guest: that was me. c-span: where did you get the interest in this? where did that start? was it at the journal when you started? what triggered the idea that you said ivan will probably publish this book? >> guest: well, i tried to sell it to other publishers, too, but he bought it. [laughter] c-span: when did you start that process? >> guest: it was about three years ago. look, i've been covering higher education for a long time, and i think what was the driving force behind this book was, again, this sense that i had this advantage that other people did not. i kind of understood what was going on behind the scenes in higher education both because of my background, you know, in terms of my own family, but also just because of all the reporting i had done on higher education. and, you know, what happens when a student walks onto campus today, there's, you know, you're an 18-year-old, you walk onto a college campus, and someone hands you a guide this thick and then says, ah, pick anything. see what you like. and, you know, administrators kind of tout it as this choose your own adventure game, and it's not. i mean, 18-year-olds, the bottom line is 18-year-olds don't know what they don't know. and to me, pretending that, you know, they're going to be able to craft for themselves a brilliant education when often many be of our general education requirements have been dropped, the core curriculum has been dropped. people like to talk about how, oh, they think that, you know, people who are wrapped up in the idea of a core curriculum just want the great books of western civilization, and it's their attachment to western civilization. i want a core curriculum because i think people need some basic foundation. the education that an 18-year-old will craft for himself is completely haphazard. you'll have animal behavior for an hour on monday, introduction to psychology on tuesday, you know, french literature from 1800-1850 on wednesday, and at the end of four years of this can you really say what this broad education you were supposed to have, what that turned into? and this, you know, professors are doing this, too, because professors want to spend their time researching their own little, narrow subject. they would also be perfectly happy to teach a class in their own little, narrow summit. and no one is saying to them, no, no, no, you may prefer to teach a tiny seminar on an obscure topic, but what these kids really need is a broad introduction to your subject. c-span: you say there are no jobs for tenured professors out there, but you say your sister has a ph.d.? >> guest: she does. c-span: is she teaching? >> guest: she teaches at new england conservatory where they do not offer tenure. c-span: did she do that on purpose? >> guest: no, i don't think so. [laughter] i think she would have been perfectly happy to accept a tenured position. c-span: so you also write for just the reason that larson elucidates, higher education is so broken right now that it's time to change the pitching mound and the distance to the bases -- are you a baseball fan? >> guest: a little bit. c-span: not to mention the strike zone and the number of players on each team. it's so broken? how come -- why are all these schools' lists to get in much bigger than the spots in there to get 'em, to bring the students in? >> guest: well, you know, there are a couple of ways in which people, you know, try to measure the quality of higher education. one is they say, you know, look, we're the envy of the world. people come here for our colleges and universities, and to that i say, well, first of all, you're talking about a very small percentage of kids. you're talking about generally graduate students who are coming here for our, you know, hard science classes. so it's not all of american higher education that is the envy of the world. but the second thing, i think, that people seem to forget is that higher education kind of has a monopoly at this point. colleges have monopoly on credentialing. people want to get into college because college right now is the ticket to the middle class. and i don't begrudge people that. i don't say, well, you know, you should just, you know, you should find another way because right now we don't really have much in the way of another way. we don't really have a lot of apprenticeships, and college has become kind of the catch-all for every different kind of career you want to pursue. but to me, i think we could do better. there's, there was a story a few weeks ago, maybe a couple months ago about the founder of paypal who offered kids, i think, $100,000 if they would drop out of college and come work in silicon valley or, you know, create their own kind of start-up instead. and, you know, a lot of these kids kind of already had credentials in the sense that, you know, they were already working for ibm at the age of 13 or something like that. so they weren't going to have trouble getting a job. but his point that i think he was trying to make was, you know, there is a price for this, and, you know, you could spend four years and this amount of money on something, but you better understand what the value of it is. and for some people it doesn't have much value. for some people, you know, you can, you can get a job out there without it, um, but the other question is, can't employers find a way of measuring, you know, someone's qualifications for a job without just using the college degree? and i think we need to think more creatively about that. c-span: who have you listened to in your professional life that talks the best about tenure? who's the most convincing? >> guest: who's the most convincing -- c-span: that it's the thing to do, it's right. >> guest: let's see, oh, that's an interesting question. um, you know, i guess there are a number of conservative professors i talked to about it. i mean, look, john silver, for instance. i don't think he is in favor of getting rid of tenure, but i think he thinks it's in need of serious reform -- c-span: he was the president of boston university. >> guest: yes. c-span: 85 years old. >> guest: yeah, yeah. no, i think he has very strong opinions about the reform of higher education, but thinks we do need to keep tenure. and, look, um, you know, i think tenure has protected some very smart people, um, who have said some dissenting things that needed to be said. and, you know, i understand that my argument sort of throws them under a bus. i interviewed checker finn about this, he's a former assistant secretary of education who now works on education reform issues, and he sort of summed up what i eventually took as my position which was, you know, saving the jobs of 400 conservatives is not worth safing the jobs of 400,000 liberals. he said the situation is so completely unbalanced now that the idea that we're just going to keep the system because of the few conservative professors who are out there just seems silly to him. c-span: what's the cherry award? >> guest: the cherry award is a teaching award, and i think you get maybe $200,000, um, for being, basically, the best professor in america. so a couple of years ago when i was at the journal, i did a story ant the three finalists -- about the three finalists. it's given out by baylor university, and students can nominate you, other professors can nominate you. and you, basically, there's a committee that eventually sort of judges the finalists and decides, you know, who will win, who will win this award based on their ability to convey information to students. c-span: by the way, again, sorry to the interrupt, but ken starr is the president of baylor university, now, and it's in waco, texas, in case people didn't know where it is. and you wrote about the three that were the contestants -- roger rosen brat who people would know from public television, and two other gentlemen, do you remember their names? i'll try to find them. oh, mr. berger, edward berger? >> guest: he was actually the eventual winner. c-span: and elliott west. >> guest: yes. at the university of arkansas. so i actually went to see berger and west in person, and they're two very different kind of styles of teaching. west is, you know, he's not dry, but, you know, he sort of is telling a story, and he's been telling this story about american history for many years. there aren't a lot of fireworks or she shenanigans going on, bui was sitting in an audience of 200 people, and the only visual aids, he was putting up some slides of, you know, of historical photos. everyone was just sitting there and listening to him utterly rapt because he kind of knew how to tell a story, and there was a lot of information being conveyed. and he wasn't, you know, reading off of notes and just sort of staring down like this. he really was engaging with the audience, trying to see are people awake, are you listening to me. and berger was sort of much more dynamic, kind of, you know, doing a little more jumping around. but, again, you know, there weren't a lot of fireworks, and he, he really, he did, um, a speech at parents' weekend at williams, so it was parents and students. but, you know, he's a math teacher. now, you know, and this sort of struck me because the best professor in america is a math professor. i mean, you have to not only sort of convey these ideas, but you really have to engage people who, you know, lots of people just have to take his class because it's a requirement. you know, he's teaching kids who are not necessarily interested in the subject, and he's making them interested. c-span: let me ask about you said the best teacher in america, according to -- >> guest: according to the cherry awards, yeah. c-span: who judges the cherry awards? >> guest: the faculty, and they bring in people outside the -- c-span: of baylor, and the winner gets $200,000? >> guest: they have to come to teach a semester at baylor too. the reason i highlighted this was when people are talking about why we judge professors by their publications and not by teaching, the first response is, well, you can't really measure teaching. teaching is just all subjective, you know, you know good teaching when you see it. i don't think that's true. i think that's a total copout. i mean, these are, these are professors who, you know, there are ways of measuring. you know, everything from the lecture style to grading. when someone gives you back a paper, does it just have a, great job, exclamation point at the end, or is it all marked up? are your grammatical mistakes corrected? is there a sense that the professor has really engaged in this process with you, or are they just going through the motions? c-span: how old are your kids? >> guest: 2 and 4. c-span: do you think by the time they're old enough to go to college you'll think it's a good idea to go to college? i mean, based on the fact right now one school in this country, i think, is $60,000 a year tuition. >> guest: yeah. um, i think that if you pick and choose very wisely, it is possible to get a decent college education. but you have to be really careful. and it begins with, obviously, the process of choosing the college. i mean, i can't tell you the number of people who i hear talking about, they go visiting, going to visit colleges with their high school juniors in the middle of the summer. i ask them, why? what are you doing there in the middle of the summer? are you just looking at the scenery? can't you just look at the view books they sent you? go, sit in on the classes, and don't just sit in on the classes that they say, oh, you can visit this upper level constitutional law seminar. you won't be getting there until you're a senior, if then. go visit an intro class in a subject you're interested in. c-span: did you do that before you went to harvard? >> guest: no, actually, i spent my freshman year at new berry. c-span: why did they do that? >> guest: because they knew that those were the places that i would get a good education, and harvard was not among them, by the way. c-span: why did you switch from middle bury to harvard? >> guest: it was a little too isolated for me. >> c-span: in vermont. >> guest: it's in the middle of vermont, and i just, you know, sort of socially i didn't feel it was right for me, but i also felt like the students weren't as engaged as i found them to be at harvard. c-span: where did you meet husband jason? >> guest: at "the wall street journal." c-span: and you two live where now? >> guest: in new rochelle. c-span: and what does he do? >> guest: he still works at the journal, he's an editorial board member. c-span: when did you finish this book? >> guest: well, the book came out in june. c-span: yeah, but when did you finish it? >> guest: i finished it last fall. c-span: so you're on your way to the next book? >> guest: yes, on a different topic. it's about interfaith marriage. c-span: is that what your situation is? >> guest: not quite. my husband's of no faith, but it's a subject that interests me. the thing i write about most besides education is religion. c-span: and when do you plan to have this one completed? >> guest: well, due in june to oxford university press, so if editors are listening, june. c-span: big book -- this is not a huge book. is the next one bigger than this one? >> guest: i think it will be. the next book is a lot of, um, i got funding to do a national survey on interfaith marriage, and i also spent about four months sort of doing, traveling to do interviews with people across the country, so it's -- this is sort of more, you know, kind of a summary of a lot of things that i have learned about higher education over the last number of years as a reporter. c-span: the name of the book again is "the faculty lounges and other reasons why you won't get the college education you paid for" by naomi schafer riley, and we thank you very much. >> guest: thank you. ♪ ..
CSPAN
May 4, 2012 5:00pm EDT
start. there is direct u.s. investment. higher than the total. such a big community of companies, a company which is american registered usually is partly owned by european stakeholders. so because of the critical dependencies between our u.s. companies, the policy corporation has done well in many fields. and the current eu working group covers only a fraction. so therefore this strategy obviously is designated to allow us to work on the more comprehensive approach is. dependencies will grow. part of the landscape is the netting states have very strong calculations. more harm than the very important dimension of our landscape. we work together. serve the same objectives. in the policy aspect of cyber security, the department of state to include its strategy and diplomatic cyber securities including working groups. originally they're referred to a direct contact with global and foreign policy issues. not specifically with cyber. but now we have a strategy dialogue which has been proposed . and the u.s. security policy, those working relations with the department of state cyber policy of this. this is also a field which is developing quickly. so what could be the agenda? if we should have, what could be the agenda? first, you in u.s., strategic partners, full democratic values and the rule of law which said. we need for that behavior in cyberspace. norms of behavior. existing laws and rules which have to be implemented fully. this is a very technical challenge. we are for cyber crime. explain to you. conflict in cyberspace we have also cyber convention, but also some that we had also in new york, part of it is that we have international law in countries. our application in the cyberspace. confidence-building measures are important. we think couldst stabilize cyberspace. the principles of human rights laws. to have a common vision is essential if we want to shape the engine. secondly, on cyber crime and cyber security we have obviously a very practical corporation. at think this will always remain at the center of all work. this has been described by you. up would not come back to it. private sector, the compact between our business is well defined a certain dynamic. it is crucial to define how to protect the most critical thoughts of our independent infrastructure, the transatlantic format. there are many exercises. and remember in 2005, already under protection. this error projection, the dimension of all that. leila environment, provides security, also very important and should be encased in bats. we have also to stimulate the contact between cyber security community's. so this is basically the main element of the agenda. what could be the main priority, more in-depth. the application of law. but i would mention briefly, to strengthening the global response on cyber security. many cyber threats have been by the commissioner. there is weak. cyber investigations. the criminal misusers of computers. if i may remind, at the time when i was spokesman, one day i was in charge of the internet department. one day while opening my computer going on my website i see that they had been replaced by very little. it was in 2004. and then i said okay. we should be able to to at least know. only to congratulate him for his sense of humor, but we should be able. then we went. and we were able to see that this was coming from a tiny country, a tiny -- is blonde country in africa. i will not name it. a very small pantry. no agreement with this country. so a longstanding challenge that i hope to see one day. and i think there is unleash to really. [inaudible] , we can develop security in countries in cyberspace without sacrificing freedom. we have to put some money on that. at the time we have to coordinate how we do that. we have the same. that is an important part. as you know, very interested by. november last year. but we are also -- some aspects in strengthening that we should take into account. cyber crime, but also the developing countries to completely establish, to put it in a very famous speech, a new rule on the internet to, that formula. no. you know, what we want to avoid, some countries establish new rules on the internet. and an example, you know, the eu has began when discussing sanctions for countries like syria, for example, to make sure that when we establish arms embargo we extend the arms embargo, cyber tools. we can be useful, repressing the population and preventing it from establishing. this kind of reflects automatic reaction that we have to develop automatically. finally, i would say -- i would come back to the claim of the united nation. we have an important discussion in the united nations, and the major initiative by china and russia to increase the proposal to frame the discussion, classical arms control mechanism to favor more government control , the free flow of deprivation. this is also an issue on which we have to talk because we see having the u.n. we need to be sure. at the same time we would like to be able to focus or refocus the main purpose of that to replace cedras security in preserving freedom of information. that is why we really need to act together to get the debate. i should stop here. far too long. i think you. i hope the commissioner will not cut my head. absolutely not like that. thank you for your attention. [applause] >> and thank-you to csis for sponsoring this. for sponsoring this event and inviting as to participate. i will start by saying, i and largely echo of the comments that have been made, particularly in terms of the very strong working relationship between the u.s. and the eu on cyber security matters. if you set aside the data privacy issues, then i think you find that we are almost in complete lockstep on most of the key issues. also, as prince of very well teed up for you at the end of his comments, we both look ahead and see a number of very significant coming debates basically that have already begun that are going to be very active in the year ahead at the u.n. on things such as the group of governmental experts looking at norms for state behavior in cyberspace that the u.s. and international telecommunication union world conference on information, technology that will take place in dubai this december looking at revising its treaty document and how cyber issues can or should play in that document. i think it is very encouraging steadily from the u.s. government policy perspective to know that we have in the eu such a strong partner on these very high level policy debates and challenges that we face ahead. what i would like to do is spend a few minutes talking to you about a couple of i think fairly concrete or may be nearly focus areas in which we are currently engaged with the you and that, perhaps, offer some examples for continued successful engagement and cooperation and collaboration. so i will first put on my hat as a senior policy person for the office of the coordinator for cyber issues at the state department which is an office that was created in february of 2011 when a secretary -- secretary clinton appointed my boss to serve as her first coordinator for cyber issues. this was something that was done in conjunction with the finalization of the u.s. international strategy for cyberspace that came out in may of last year. the basic idea was looking at the state department which is largely organized along their regional bases and then a functional basis, trying to figure out a way to ensure that within a large organization like that in the same way that the united states government has created a set record net position on the national security staff, a way to ensure policy decisions can be made that take into account and reflect the different equities that we face in our foreign policy engagements. and so the office has been up and running now for about 14 months, and among the key things that are going on now that i think are worth noting for this group are as francois mentioned, increasingly engaging with the european union in addition to a key eu member states on a wide range of cyber security issues. we have a steady flow of the u.s. and ec officials as well as senior officials from all wide range of countries, but particularly european countries coming through the state department, coming through our offices. it is almost an exponential growth in the interest of talking about cyber. it is -- it is very encouraging. sometimes it is almost overwhelming to try to just hit the key opportunities in an n like the csi as conference where we can talk about these issues. certainly we are seeing a real interest across the board in engaging on cyber security. another thing that has been very encouraging is to see that increasingly other countries have either come up with the same idea or followed the u.s. lead and are appointing senior officials to manage their cyber policy work, particularly in their foreign ministries. france, the u.k., germany, japan, russia, the netherlands have all within the last year appointed a very senior officials to make sure that their governments have a clear point person who can manage and develop their cyber policy, their international engagement on server security and several policy issues. we are also seeing more and more countries issued national strategies that define how they view the key policy issues, how they have decided to organize their government, how they have decided to engage with the private sector. and that is another very encouraging trend that we try to encourage countries to really think seriously about these issues. again, keeping in mind that particularly as we move through the next few years there are going to be some incredibly important policy debates and international decisions that are going to be hashed out in places like the u.n. would be 0sce or other key regional organizations like the eu and the council in your. apec and the organization for american states. name any multilateral organization and they're is a very robust high-level cyber work stream that is going on. but helping countries think ahead and start really forming their positions on a lot of these key policy issues that relate to internet governance that relate to norms, that relate to how we deal with cyber crime, and that is where the u.s. and the you can really work effectively together to help other countries understand the issues, understand the implications, particularly of things like the russian and chinese cut of conduct and help them see that the high level view that the u.s. and the eu promote are really the most consistent with notions of international law, human rights, ensuring that we have a safe and secure, open and interoperable internet. so some of the other -- a couple of the other key things that i will just highlights, our office is increasingly working with eu institutions or european commission institutions like the external action service to find ways that we can better integrate our capacity building efforts. the u.s. conducts a very robust international training program focused particularly on the cyber crime and cyber security, also countering terrorist use of the internet that is funded by the state department out above our counter-terrorism and our international narcotics and law enforcement bureau. and one thing that has been missing, the same level of engagement by institutions like the eu, by individual eu member states, but we are starting to see much more interest, particularly by key countries, key partners like france and germany and the u.k. and making a much more robust investment in their capacity building efforts in places like africa and asia. we are working on a number of upcoming programs that the state department will be leading where we are going to be doing a joint programs that will include eu, ec, and a number of other key partners, including other g8 countries such as japan and our capacity building efforts. we think that is a great way to go forward. let me shift now to talking for a minute about cyber crime. most of my background is as a career cyber crime prosecutor for the department of justice. currently working on a temporary detail. and i also share the gh high-tech crime subgroup. a little bit of experience. and i think if we look at the successes we have had in addressing cyber crime, they are instructed and provide a good model for how we can tackle other challenges like helping ensure countries have a secure and resilience that work. we have been dealing with cyber crime, collectively the u.s., europe, for almost 45 years now. we have been in have focused wait building our capacity and capabilities to combat cyber crime. a couple of the key things that we use as the pillars for trying to create a world where there are no safe havens for cyber criminals to operate and all countries can effectively deal with cyber crime challenges are the promotion of the budapest convention which currently has a little over 30 parties to it. the u.s. was one of the countries that helped negotiate the convention. we signed it when it first was open for signature in november 2001, ratified it, and it went into force in the next year or two. spring completed its ratification. japan is 99 percent of the wake. we are also seeing good movement in other countries like canada, australia that have been working for years to become parties to the convention. synagogue asks to be a part. the republic and a number of other countries, mexico that are in the process of becoming parties. the philippine is in the process. i know of at least five or six other countries that will in the coming months be announced as becoming -- as working toward becoming parties to the convention on cyber crime. that is encouraging because what the blood test to mention, laws that allow you to a in next. you have to have the right powers so that law enforcement can get stored communications and data can get to intercept. actually serves as a treaty, the convention encourages law-enforcement counterparts. so one of the things, it created a 24 / seven network which has grown to 60 countries. we are adding a new country every few months now which includes a really wide range of countries from all over the world. and it -- and things like that can serve as a very effective models for how we can, you know, worked to build capacity by bringing countries along at different stages, getting them involved in informal networks that can then lead the institutional capabilities to then become better able to really deal with cyber crime on their own, to do things like joined the budapest convention. we do a lot of international average and training. we hope countries set up laws, to help them build the investigative capacity to establish forensic labs. that is the type of work that particularly in the cyber crime area that the eu and the u.s., if we really put our minds to it can find some pretty opportunities to collaborate and really help build the international community, raise the baseline so that there are no longer these instances like were mentioned where you have countries that are essentially safe havens for criminal actors or other see what to do bad things in the internet. there will be that problem. i think we're making a lot of great progress toward that. >> thank you for including s in the presentation. if you have any questions, either here or later on offline to please feel free to us reach out. i'm happy to talk to you about cyber crime or foreign policy issues. >> thank you. a very full presentation. we have of a few minutes for questions if people have any. i have a couple. maybe all start by asking all three panelists. if you were going to think of where the strength of trans-atlantic cooperation might be, with the operational areas, not the policy of negotiation, but the operational areas where they're is a benefit or possibilities for cooperation. would this be more than crime? crime is easy. everyone thinks -- almost everyone thinks it is bad. are there other areas tonight particularly when you think about intimation sharing, how much do you create? thomas t. bass the same kind of risk or problems you would face on information sharing for passenger data when you think of affirmation sharing? so i don't know. how would an operational trench work? >> a great question. i think there are probably many areas, operational collaboration some of the ones that are ongoing today, those are the ones we have identified. late last year we held a u.s. eu cyber atlantic tabletop exercise which took place a year earlier than it was originally scheduled we are agile there. we looked at two different cyber attacks in areas and how the responsibilities work. there was an after action report for that, set a series of annual incident management conversations between us. and particularly involving the european network and information, security agency. so that is working well. obviously it connects also with the bilateral cooperation that we have with individual countries. that continues. on testing and incident management approach that is a big piece of it. all come back to the information sharing because that is critical to that corporation. let me mention a couple of other areas. we are working together on awareness raising. in the context of empower individuals, we are going to be doing some work. we have our stop, think, connect campaign which i mentioned. the conversation with the europeans. the european way to attack that. a question, and we will also be doing some work together on best practices for job protection online schedule to coincide with the u.s. national cyber security and awareness month this october. that is exciting. and in the third area, just working in the public-private partnership. as was stipulated earlier, governments can do this. there are some particular words that we will do together in an industrial control system area. next week we are having conferences. there will be an international partner stage as part of that, and there is also worked together on botnets. a lot of areas of cooperation and collaboration. on the information sharing front , the approach that we have found successful in the united states and also found successful on bilateral arrangements is to really just whenever you share information, you know, state what the agreement is about how we can be handled. you can use the red, yellow, green approach that is just for that conversation. it can be shared with the trusted group or it can be more broadly disseminated. at this point we are in a place where we have to kind of deal with it on the case by case basis and get some experience before we come up with a overall framework. but i think that can work quite well as long as you are explicit upfront about how it would be shared. >> thank you. >> information sharing. it is a difficult area because it involves usually a lot of information sharing on business solutions and practices. let me go back to another field which as a member we feel at your level it is useful to think about which is the value of protection. when you think about the convention, by a weapons, biological weapons, we see that when you want to share information about buy weapons practices you face the same problem because in a way you have to have the software to know how to defend yourself. usually this involves a very high sensitive intellectual property problems. and if you think -- if you forget for one second about computers and you think about bio it is exactly the same problem. you need to have the biological agent which is usually refined with increased performance which usually as part of the intellectual property highly sensitive information. and on this basis you can find. so in both cases the situation is a bit similar. what do we do in the biofuels? we tried to promote a minimum level of protection. first, we have. we still have to work out in the cyber field. we need good practices and regular meetings between experts on practices. first of all to be prepared. western framework. the most advanced. but on the other hand, to be responding because as you pointed out, the defense is the weakest point of the defense a chain. you have to drive a global ambitions if you really want to get something. and then in this context establishing the proper context, then you identified the most. usually you will see that in the proper context you discover that you can share much more initially without having to set up the proper context. so that would be. >> just very briefly. obviously information sharing is one of the hottest current issues facing us in terms of dealing with server security. you only have to look at the proper of bills currently. most are focused extensively, if not often exclusively on how the help the government's better share in permission internally and with the private sector, but in terms of existing, i think, successful operational affirmation sharing, things that we can look to, what is going back to the criminal law enforcement example. .. huge organizations that the secret service carried out. you're increasingly seeing, you know, larger and larger groups of countries working together to tackle cyber crime or transnational cyber crime organization that have members in many different countries. and successfully being able to keep those investigations secret until the appropriate time, arrest people, execute search warrants and do that effectively. i think that provides some lessons. the other thing i want to mention briefly, is another area where there's great opportunity and fantastic work being done right now by dhs in expanding cooperation. there's an international watch and warning network made up with a smaller group of countries. one of the things i hear constantly, i travel around to different countries and international conferences is a real desire for international partners to find better, faster, more comprehensive ways we share information about threats, signatures for malware. as an area of focus on an operational area. that's one thing that yield huge dividends for us and again, that is particularly, i think, appropriate for discussions within the context of the u.s. and the relations of the cybersecurity. >> okay. we have one question over there. that might have to be the last one. >> could you grue intro deuce yourself? >> i'm allen from the fans substitute. the law enforcement sharing is amazing. the effects are impressive, but i think the largest lever we have to where there cube cooperation where i think there is known of the buying power of the governments. secretary lewd mentioned one the big needs is to get the vendors to deliver technology with security banked in to get the isp to deliver safer networking. is there anything gone on between the united states and europe in sharing the buying power so you can use the leverage of procurement to essentially make systems that buying defensive instead of indefensible? >>. >> you have a right to point it. the answer is we are not fully yet there. we're precisely one of the issues with strategy is intenting to answer. if we could make a wish at the end of the conference '00 when they go to buy a computer, i ask -- i have asked is it possible to find a computer on the market which would allow me to disconnect the we if i so i could be 100% sure that nobody could make -- strangely, it's not impossible to find that on the market. but go to best buy, go to whatever i've been answered no. there's no computer with a physical disconnect. so all of the computers you have, they could be misused while you're online. things of that kind, this kind precisely we want to reflect upon. because it is a key format we need a strategy. let me add, that we also have been war in the context of sep a tool which is very european the insurgency which is trying to make the relationship with between nate tow and the situation that we are all talking about the same things. they are also beckoning to some kind of ideas we could be injects in how it was, you know, -- thinking about how to. these we are have it in mind. we are not yet there. >> no, i guess not. with that, could you join in thanking our panel. pllsz we have a coffee break and we'll reassemble for the panel on law enforcement. thank you. [inaudible conversations] recess prime time first up tonight former black panther on his book panther baby. a life of rebellion and reinvention. and at 9:15 state sei on the founder of the girl scouts. and at 10:50 michael sean winterers on his biography of jerry hold well tighted god's right hand. you're watching c-span with politics and puck lie fair but key public policy then and every weekend the latest nonfiction authors and books on book tv. you can see pass programs and get your schedule at our website. you can join in the conversation on social media sites. the libertarian party hold the 2012 convention this weekend in las vegas to pick the nominee. c-span coverage begins tonight at 9:00 eastern among candidates with the libertarian presidential nomination. then at noon eastern on saturday, delegates hear speeches from the candidates and vote on the nominee. all of that live also on c-span. more white house coverage from this weekend. president obama holds a campaign rally with michelle obama in richmond, virginia. that gets underway a4:35 p.m. eastern tomorrow. with live coverage on the radio, and on c-span and on c-span.org. former treasury secretary larry summers and martinfield sign spoke about tax reform yesterday at the brookings institution. they were introduced by another former treasury secretary. [inaudible conversations] good morning. i'm bob on behalf of the colleagues at the hamilton project let me welcome you this morning to our program which will be discussion, titled, "economic faxes about taxes, rates, revenues and reform options." the project began about six years ago, and it put together a truly distinctive group of policy experts, academics, and practitioners, in that context, we don't endorse specific ideas we do do is we organize serious decisions that are critical to our economy, and in that respect, we have events like we have today with academic and policy experts and practitioners. when we have papers, those papers are subject to rigorous peer review. we believe that the objective of economic policy should be growth and competitiveness, broad based expanse of living opportunities, and economic security. we also believe they can muteically reinforcing. we support market-based economics, but we believe equally that it is vital to have a strong government to perform those functions that markets by the very nature will not perform. the hard shoip that many americans have been experiences and continue to experience requires a serious commitment by policy makers in the supportive of that commit hamilton project had a number of discussions and events around short-term policy challenges. but our primary focus continues to be long-term economic policy. we believe that our country is well positioned in transforming global economy because of our enormous long-term strengths. we also believe that in order to realize that potential we need to put our fiscal situation on a sound basis. we need to have strong political investment. and we need reform in the areas that are so central to our economic success including health care, immigration, and tax reform. and that takes us to today's program. there is wide spread agreement that our tax system is badly flawed and badly in need of reform for the future of our economy. beyond that, however, the agreement breaks down, there are many different views as po to the purposes of tax reform and to the changes necessary to accomplish the purposes. our objective today is better understand these different views, the effects of various opposed tax reforms, and the criteria for evaluating tax reforms. in that respect, let me make a few brief comments as framing observations with respect to discussions to follow. number one, major change in our track structure and the level of tax taxation increased revenue that increased confidence could promote growth, reduce inequality, and contributes substantially to establishing a sound fiscal trajectory. that was my point before about increased revenues contributing to debt reduction. number two, having said that, there are vigorous gaits about what purposes tax reforms should what the effects would be of particular changes and what the level of taxation would be. number three, any substantial tax reform will have major winners and major losers. and that creates a very difficult substance with respect tax reform, and very difficult politics. number four, any substantial tax reform will inevitably have multiple effects on our fiscal position, on inequality, and on growth. and finally, as we all know, post election period of 2012 and the first few months of 2013 will pose fiscal issues of enormous importance. whether that leads to constructive action or, or political system kicks those issues down the road remains to be seen but are, but as our view, tax reform at least has the potential for helping the response and could play an important role in that response. with that, let me jute line our program and briefly introduce our panel members. as you can tell, it is a remarkable set of individuals. remarkable may be an overused work, ties applicable to the group we have today. i'm not going to go into their resumes. they're in your materials. begin with the hamilton -- facts about tax policy. the paper will be presented by adam loon any policy director of the brookings institution and one of the nation's leading exerts on the economics of tax policy. also, if you look at the extraordinary working group on the front page of the paper that helped guide this paper, it'll give you a sense of the truly distinctive strength of the ham l tom project being able to bring together such an extraordinary group. then we'll turn to the first round table titled the economic case for tax reform. and again, this is a remarkable group for this discussion. the discussions will be martin felled sign professor of economics at harvard university. president of the national bureau of economic research, and former chair of the president's counsel of economic advisers. and lauren summers, charles wmplet elliot, former president of harvard university, former secretary of the treasury, and former assistant to the president for economic affairs. the moderator will be the economics editor of the economist. i said i wouldn't comment on the participate's resumes. i won't. i like to make a few personal observations. marty felled -- in marty's case for many years and in larry's case for decades. both are excellent listeners, though challenging, they are changing, but they are also excellent listensers who process what they hear. are open to changing their minds, and then give you reason to conclusions with strong grounding. so in addition to the pre-imminence, they are exceedly well suited to the recent discussion of tax reform needs so badly but so seldom get pches i also had the privilege of being on panels panels with zani. she frequently knows more about the subject at hand than the discussions. when i'm on the panel she surely knows more. our second round table is key principals for a successful reform effort. the discussions are honorable john i think lar. president of the business round table. former governor of the state of michigan. jim president and chief executive bureau economic research. professor of economics at mit. john chairman and counselor of the senator for american progress, former chief of staff of the white house, and alice rid lane. brookings substitute former deputy director, former vice chairman of the federal reserve board. the mod moderator is michael greene stone. the professor environmental economics at mit and the former chief economist of the cia. i said beginning it is a remarkable group of people. again, i'd like to make a couple of personal on vases. john was a committed republican but he also worked effectively across the aisle with both parties. and that is the spirit that we're going to need tboat accomplish tax reform and more generally to move forward on the issues of our country. i was in the clinton administration with a john. arguingly the chief of staff is the most difficult job in the government other than being the president. job was an outstanding chief of staff as well as a friend. he's been a major force of policy for founding the center of american progress and advising members of congress and the administration. i also had the opportunity to serve with alice. she was always an effective and thoughtful colleague, and has long been a major voice in what arguably is the country's most fundamental problem or policy challenge, and that is reestablishing sound fiscal conditions. jim has what is thought by many to be the most important job in the american economic. he established a enormous challenge of successfully seeding a giant in the profession marty. succeeding a giant is never an easy task. by the way, in terms of the president, the head of the national bureau of economic research being the -- marty was that. i asked if that was true, he said yes. [laughter] finally, michael greene san antonio provide outstanding leadership the the hamilton project, and also provided frequent tour or iting for many and so many members of the or projects. as you can tell from the morn's program. today's program will give all of us the opportunity to listen to and engage with preimminent thought leaders on the economic issues of our country. for developing the intijt construct and bringing the program together. i'd like to thank in particular, michael, karen anderson the deputy director, and adam luny. and former assistant secretary for tax policy with the department of treasury. and key as always to the work of the hamilton project, i thank the enormously talented committed and hard working staff of the hamilton project without which nothing that we do would happen. where that, adam. i turn the podium to you. thankthank you very much. [applause] >> moderator: thank you for that warm introduction. since the last major tax reform in 1964 the tax code has been complicated, less efficients and increase belie -- ad have candidates for tax reform would tell us by broadening the tax base we can have a simpler system with lower are rates. that's not all they tell us. to some, tax reform is an opportunity to reinvigorate economic growth, unleash economic activity, create jobs, boost revenues and help solve or deficit problems. to do all of the things at the same time. so today we wanted to provide the foundation for a discussion of what tax reform should accomplish but also to put up guardrails on the conversation to keep it grounded in the evidence of what tax reform relistically can accomplish. on drawing the expertise on the tax excerpts among the advisory counsel. the hamilton project put together half dozen questions. i hypo you picked up a copy on the way. the starting point is the observation that the economic context today is for a more challenging than in earlier tax reform areas. it's not statement about today's unemployment rate, the political situation, we're in the tough fiscal choices we must make by the end of the year. it's also about the fact that we face at least three important long-term economic issues that relate closely tax pomtion. rising inequality. any tax reform is likely to be judged at least in part in how impacts those three issues. the first issue the daunting outlook for the federal budget. the basic purpose for the tax system is to pay for government services in that regard the u.s. system comes up short for instance 2062016 the federal government is expected to spend $4 12 per american but receive $4 97. we need to collect more revenues as a share of the economy over the next several years than we spent each year. that dpairson understates the change as the aging population and continuing to rise in health care cost increase federal spending well above historical levels. it's difficult to envision a scenario in which there is not a solution. and end and exam the role of revenues in the broader fiscal debate. documents provide evidence about how tax refer us in in the united states compared to those in the other countries various tax reform options effect revenues and contrast the scale of popular budget options for the magnitude of future deficit. a second long-term economic issues is increasing international business activity. the rise more educate eve and capable work forces around the world. and other economic changes have reduced to economic opportunities for american and challenges many businesses. one sign of the impact of the trends is the stagnation in earnings. for many american workers over the past several decades, concerns about competitiveness have encouraged greater striewt any impede economic activity. and tax reform has widely been counted as an opportunity to boost economic growth and the document we summarize economic evidence regarding current tax system distorts economic activities and how much we can expect tax changes to griewf the economic process. finally, there is the issue of growing inequality and the issue of the tax code. pretax incomes have risen by more than 250% for house hold in the top 1%. at the same time hose hold in the middle and bottom experience weaker growth. changing the tax system tend to exacerbate the inequities. the very people who received the biggest income gains have seen the largest tax cutses. it's already clear that issues related inequality will be paramount in discussions about the tax system. and to inform that debate, we provide evidence how alternative reform options effect the tax schedule. the document expands in the three areas and provides facts on dozen -- just to piquÈ your interest i'll highlight two. fact nine exams how individual tax rates effect the employment and earnings of workers. a key consideration is how much tax rates hold back the u.s. economy. how much lower rates would spur economic gains, and we have increases in income can help justify set losses from lower rates. the figure in your text illustrates how a 10% cut in rates would effect the employment and labor on typical american family drawing on the evidence of 23 published studies. the average estimate suggests that the family would increase the pretax earnings by ruchly 450*d off the basis of $70 ,000. that'sen increase of -- the same tax cut is predicted to reduce the federal income taxes paid by 8.6% the evidence suggests that type of tax cut has large effects on revenues but relatively mod rate effects on labor supply. tax six congressman exams the limits can accomplish lowering tax rates. we often hear of tax plans highlighting the top rates. 28% -- 20%, 15 minuter, even 999. but those plans are sometimes light on details on how they effect revenues or change the tax burdens that fall on different groups. we put together a cheat sheets that startings with the con trant on maintaining current tax revenues and tax structure. from the the starting point then ask how low tax rates can go under alternative based broadening proposals. so under current law, as you can see in the top row of the table, tax rates are scheduled to rise to a level of 40%. skip to the punchline, it's only through dramatic tax reforms eliminating all tax expenditures including those for horns, retirement savings, presenter rates on capital gains and dividends. can lower rates to 27%. that analysis illustrates a broader take away of the document which is how difficult it is to achieve the efficiency lower enhancing rates before revenues fall and tax codes being less progressive or popular taxes are scaled back. i encourage you to look over the facts. i hope it's useful to you in your future conversations. thank you, and i look forward to the panel. [applause] i ask that you sit on the left here. the audience use the appropriate place to be. >> i'm in the wrong seat. it's okay. >> welcome to the first panel. and something to tax reform has been in washington pretty much for as long as i've been following u.s. economy policy which is getting on for two decades. the flex complexity of the tax code is distoesed again and again from the reform there are been gaits over the past decades of flat tax, wholesale reform, the 1986 tax reform. even that happened. the tax code got more complicated and politicians added more pages. it seems to me the debate today is taking place of the large deficit, a weak economy, wide,ing inequality. this is an immediate call to ox. so not only is tax reform back on the agenda, i think it's back on the agenda in the way that may result in action that indicates in the past. this conversation about what kind of tax reform we should be doing, has an importants and the urgency that can't be exaggerated. this is why the discussion is important. we have two extraordinary well-placed individuals of different perspectives to discuss what sort of tax reform we should be doing. the debate. what sort of tax reform we should be doing. you all now them professor of economics harvard university. president at -- former chair of the president counsel of economic advisers. larry summers. former chairman of the national economic counsel. former student of and former professor of -- [laughter] so i think marty, let's start with you. i want to start the conversation by actually working out what should be the priorities of the tax reform today? because tax reform has all kinds of good priorities. people taunt -- the simplifying the code. raising revenue. but many of these are somewhat center depending what your priorities are. put forward different kinds of reform. can you lay out what you think given where the u.s. economy is right now. what should be the priorities? >> guest: larry and i come out of different political parties and afill indication. larry and i were talking about taxes for thirty years. it's not too surprising that there's a lot of agreement. i hope that comes out as we talk about the specific issues. i think about tax reform in terms of the long-term impact. we've got a serious problem now. but i think the tax code that we put in place, i hope that congress puts in place next year, we have to think about for the long-term. one of the things it has to accomplish, the right there is an conflict among them, but there are all the trade-offs. there's the question of picking things that do better than these different goals. one of the goals i think there are four basic goals. one of them is to raise revenue. adam's chart showed we need to raise some revenue. how much we need to raise, will depend on how well congress does at limiting the growth of entitlements. that's not today's agenda. and raising revenue can be done in ways which have good side effects or ways that have bad side effects. that brings us back to the discussion about tax expenditures. the second goal in addition to raising revenue is reducing way. economist call ine fish is or deadweight. the tax system hurts productivity in a variety of ways by hurting savings and investment and hurting labor supply broadly defined. picture that adam showed us how it effects ours is a small part of that. it also effects people who take the compensation so we're induced by fact that all kinds of fringe benefits are excluded with taxable income to taking compensations in ways that are less valuable to us, but on a net of tax basis are more attractive. it also effects the kind of spending that americans do because some times the spending are tax favored. third thing that is simple policety. you mentioned that people are just overwhelmed with the complexity of the tax law. it makes come plients more difficult. it makes people feel that probably everybody else is getting a better deal than they are. everybody else has figured out some deductions to take. some credits to take. some ways of changing their behavior that lowers their taxes. we need a simpler tax code. finally, there's the fairness. fairness is more than just a question of productivity, or tax rates, it's also the tax base. fortunately, inflation is low now. even at today's low inflation. individuals pay capital gains taxes on nonnal gains even when there are nongains or real losses, i think people rightly feel that's unfair. so i think there a lot of things which income is defined for tax code purposes which add to the fairness of the system. that's my -- >> moderator: in that order? >> guest: i don't think of it as an order. i'm not going say what kind of fairness we get. or we get fairness, it doesn't matter what it does to revenue. i think you have to think about any given change in terms of what does it do for each of these inspect >> moderator: do you think in the light of the fact that pretax income and equality the goal of narrowing them creating a more progressive tax code should be in the tax reform? >> guest: not particular. i noticed in the background material, one of the things that was suggested was combating inequality. my feelings for a long time. there are problem in the income distribution area is provety. we should be concerned about combating poverty. not about combating inequality. and somebody -- for a couple makes $250,000, which probably not hard to do with the hamilton project, or the university. that's not something to me that needs to be combated. >> moderator: larry, do you have a similar set of priorities or do so you a different set? >> guest: overlapping. i would just begin by saying it's not a subject today, whether we get the expansion to a sustain reasonable growth rate that is consistent with the return to full employment. it's the single most important issue facing the united states. we will not achieve any other object whether it is sustained fiscal help, the ability to combat poverty, the ability to be strong in the world, if we do not achieve that. and therefore maintain the momentum and expanding the has to figure centrally in any economic policy discussion going forward and has to have a large effect on any thinking about timing and fazing in any set of reforms with respect to the tax system or with respect to entitlements. but that's not our primary subject today. to take your on you obviously can't rank them, you can give some indications of their importance. and i would agree with marty on the central importance of revenue raising. the director of the cbo gave a very effective presentation at hazard a month or two ago on the nation's long-term fiscal situation which after going through a lot of stuff, he would reduced it to the following statement, that in order to get to a stable debt to gdp ratio not a balanced budget but the relatively modest goal, after making what he regarded as being at the edge of creditable optimistic assumptions about discretionary spending cutting, and making the odd optimistic assumptions about the cacht to cut defense, his conclusion was that you needed either to reduce all entitlement spending bay quarter, or raise all revenue collection by a sixth. if you wanted to get to the goal or you needed some combination of those two things. for a variety of reason website i think his assumptions are a little optimistic. i think it's a little worse than that. i don't think it's on this planet that we are in a decade going to reduce entitlement spending bying in like a quarter. and therefore, relative to the baseline, therefore, i think it is a near certainty that we are going to need a significant increase in revenues, and it seems to me that any discussion of tax politician needs to start there. and it seems to me that suggest that from current baselines, it is possible to cut taxes substantially, and pay for it with as yet unidentified spending cuts is close to inconceivable, and cannot represent claims that should be taken seriously in the public discourse. there's room for debate about what the balance is between the quarter on spending, and the sixth on tax increasing, but the idea that we can be cutting taxes which implies cutting entitlements by more than a quarter, i think is frankly, laughable. so revenues are at the center, number one. second, and here's where marty and i would have a difference in orientation. i think we do need to address the questions of -- and we do need to address the questions of fairness in a central way. there has been a major change in the pretax income distribution that has been generated over the last 25 years. roughly speaking, a generation ago, the top 1% got 10% of the income. today, the top 1% gets 20% of the income and ifing anything that trend is accelerating. reasonable people can argue about whether in the face of a change of that kind, the tax system should operate to offset it or not offset it. but the view that it should operate to reinforce it, cutting taxes by more at the high end than in the rest of the distribution seems to me very hard to justify on any way of thinking about it. i share marty's concern for the poor, but that seems to me, is not the only valid concern. it seems to me, that something about the help of the society has something to do with the ratio of what those who are most fortunate are earning, relative to those in the middle class what sometimes reduced in the public debate to the ratio of ceo wages to average worker wages. in conservative thought in this area actually surprises me a bit. i would have thought that the right promark view to take was that you should let the market grind out whatever income distribution it does. not interfere with theings of the market. and then the tax system as it collects revenue should be based on a ability to pay in a way that raises the burden on those who are getting most fortunate given what's happen anything the income distribution. and so the idea that you should be reducing the taxes on those who are most fortunate seems to me to be a quite surprising one. when marty talked about some policety. he referred to issues of legacy. i think the legislate mat sei of the government in which it depends depends much more on a perception of fairness, depends much more on the idea of those who are in the options to take advantage of the double differing irish shorthand witch, or the other way around, are paid their fair share of tax then it questions the simplicity versus complexity. i would come next. i would come third to questions of economic efficiency, and neutrality. but here i think i will put less emphasis on these questions right now in the united states than i would have over most of the last twenty five or thirty years for a couple of reasons. for the next few years, our economy is going to be demand constrained, rather than supply constrained. the economy is demand constrained, increasing thelessness willingness to work if not everybody who wants a job can get one isn't actually going to increase the total level of employment. more over, whatever has been true in the past, in the current world of 2% interest rates, it slightly strains credibility to believe that excessive capital costs represent a major -- in a way i suspect was true to an important degree at various points in the past. so yes, we should level the playing field. yes, we should reduce various kind of tax buys. that our present and it would be desirable but i would putless emphasis on that on the current demand constrained local capital con tex. simplicity. how can you be against that? i would just caution that much of what is said about base broadening and simplicity is itself oversimply indication. people think of base broadening being about producing tax expenditure, if you don't have that you have a simpler form. in fact, much of base broadening is about eliminating exclogses from income that increase complexity. for example, that's majority of these breedenning proposals including the repeal the provision that says that if you sell your occupied house, you don't have to pay capital gains taxes, as long as you have gain tal -- capital gain of $500 ,000. i promise if you repeal, it and everyone who sells a house has to go back what they paid for it calculate the improvements they put into it, and do the calculation. you are significantly increasing the coming flexty of the tax code. that is not an isolated example. i am in favor of various things that are sure are all taxation that all income is compensated, club memberships, all of that. we often go after more of that. but we shouldn't kid ourselves that we will have a simpler tax code if we do. i am sympathetic to ideas that are widely part of tax reform proposals to convert deductions into credits, so that they can be claimed at the same rate mortgage interest, for example, it's 15% for everybody not 35% for some people and 15% for others. but the result would be that more americans would be able to take advantage of the credit, they'll use that instead of the standard deduction, they will find the calculation of their taxes more complicated. i can proliferate these examples. it is just wrong to assert that base broadening is simplification are objectives to go in tandem. more likely, expensive base broadening is a complex fier. my reality, my sense of the reality is that almost everyone who has any complexity associated with their tax return does it themselves with software or or has somebody or pays somebody to do it with software. in this a context, things that could have been substantial complicaters within the existence of different rates add no complexity. put the information into the software within the software puts the number out. so i don't believe that many of these traditional concepts of some policety are exactly right. i don't believe what ised a vote candidated in the name of simple is actually simplification. i think that we would be better off recognizing simplification in a way in an issue that marty framed it creating a system that has more perceived fairness, and i think, a system that has more perceived fairness, i don't find plausible that simply increasing payments to the poor will entirely satisfy the objective of achieving fairness so long as there is a justified perception that those who are most fortunate often are most successful in a escaping taxation as well. >> we have the next three hours here. can't agree on that much. i do want to start where you agreed. you both took revenue raising. i think it both agree that needs to be a top goal. why are we -- is debate as it is now in the u.s. a crude character of the system is basically taxes a narrow base of income. it relies on the consumption tax and centralized taxes muchless on environmental taxes. if revenue raises is so high on the agenda shouldn't the tax reform debate be much more ambitious than the one that is going on in washington now? >> i think by consumption you mean evalwaited tax or something like that. and the reason i don't like the idea of evaluated tax, i think if you had evaluated tax, it would simply make it so much easier for congress not deal with controls on spending. i think there is a consensus now that we have to in addition to raising revenue, we have to slow the growth, the various entitlements and look for over savings in the discretionary part of the budget. if you could pick up four our fife or six% of gdp with the value-added tax. everybody could relax. i think that would be a mystic. >> larry what's your view? >> i have kind of the same view for twenty five years, which is we haven't had it because conservatives like marty think it's a money machine for government, and progressives think it's not that progressed. and we'll only get it the day that progressives decide it's a money machine for government and they want the government and conservatives like marty decide it's the least distoes their tax. i don't think that day has quite yet come. i don't expect it to figure prominently in the next couple of -- the next debate. look, i think whether we get a value-added tax in the united states, or not over the next ten or fifteen years is going to hinge on a question which i don't think anyone really should be completely know the answer to. which is this, what is structure really a increase in health care costs going to be? and how successful we going to be in controlling it? the truth is it's not going to be possible to control public health care costs vastly or severely private health care costs. because if you do, then the public programs won't work. and it won't work when half of the doctors opt out of medicare. so the success in controlling public health care costs is ultimately going to be hostage to the success in controlling overall health care costs. and given the interplay of technology, given the increasingly affluent society probably is right to want to devote more resources to health care given the kinds of relative price changes that take place between health care and other things. i don't know how rapidly health care costs will grow over the next ten to fifteen years. if they continue to grow at the kind of rates that we've had, and we continue to treat health care as a to an important extent of public obligation, i suspect the pressures for more revenue are going to be such there's not going to be a viable alternative to consumption and value-added. if efforts to contain health care costs are successful in keeping health care costs at rates only growing and rates only slightly greater than gdp even with an aging society, then i suspect the debate will play out in these terms because there won't be a taste for consumption taxes to pay for broad new government initiatives, and i am uncertain as to what our success will be in containing health care costs. larry's right. there's no way to be certain about it, but i think the issue comes down to how much will middle and upper and middle income people continually rising affluent middle class pay for their own health care and how much of it will be financed by the government. so even if health care costs grow more rapidly than gdp which seems likely, that doesn't mean that government could end health care costs have to rise, that much more rapidly and the proposal is a good one limiting the growth of government financed health care costs to grow a gdb plus 1%. that means that i will have to pay more out of pocket. i will for my insurance or for my health care or both. but those are separate issues from what our focus -- >> we could have a long discussion about health care reform. let's not. i think your point, larry, if health costs keep growing. maybe the environment for value-added tax changes. let's go to here and now to simple if i back to it. one is tax expenditures. the other is the taxation of capital. the corporate tax and what should happen to capital gains taxes. there's a question of reduction. >> let me say one more thing. the value-added tax. >> i don't think it's contentious. it doesn't make any sense to have a value-added tax that raises less than 2 or 3%. it doesn't make any sense 2 or 3% of gdp. we won't do it until and unless there's a political consensus for needing that much revenue and there isn't any political consensus for raising that much revenue now. that's why i'm saying the value-added tax isn't an important part. >> the revenue right now, but let's go to the current debate, and particular i are the taxation of capital. marty, i want to start with you. but the traditional economists is that, you know, the taxation of capital is more efficient. more pro-growth, and yet, we have corporate tax here, you saw the article in the sunday's "new york times" the loophole. the taxation at the personal level. still the corporate tax. how much of a problem is the u.s. corporate tax? and what needs to be done with us? >> well, the opposition correctly about the u.s. corporate tax. that the margin corporate tax rate is higher than any other country, any other industrial country at 35%. there are a lot of special features that make the effective corporate tax rate lower than that. the thing that strikes me about the corporate rate, we complies don't have a clue about who ultimately pays the corporate tax. how much of that is owned by shareholders, how much of it is owned by capital. but we understand is that in a world where capital can easy belie leave the corporate sector to go into other things, housing, unincorporated businesses, the rest of the world, then the corporate tax is not born by shareholders or may not even beborn by capital at all and ultimately is born by the workers rather than by capital. we don't really understand that. but the perception of the corporate tax that's that's it's born by corporations or by the owners makes it a very hard tax to give up. so every country in the world has a corporate tax. what distinct herbs our corporate tax from others is that we tax in a very inefficient way, we tax worldwide income of american corporations. but allow those corporations to pay their u.s. tax only if and when they bring those funds back to the u.s. which they don't. so the net of it all is that we now see that more and more multinational u.s. corporations earn profits through their producing in the rest of the world but don't bring the profits back to the united states because of this extra tax they would have to pay. and that's why one of the key reforms that i think would be a good one would be for the u.s. to join what every other ose country does is have a territorial tax system, which says that you can bring funds back to the u.s. paying a relatively small tax 3 or 4%. and we can pay the tax whatever you earned it in the rest of the would. and that's what all other cups are doing. and it would eliminate a lot of the game playing that story in the "new york times". >> what about you would that be your priority? >> i'm a little more enthusiastic about corporate taxation. i guess i make three points. first, yes the incident of the corporate tax is complicated. corporate executives see in doubt about it. nobody ever comes and argues for major cut in the payroll tax, but.. i'd adapt the dollar and so it only cost me 65 cents, 35% of the cost is shared with the government, 35% of the profits that i yearn as consequence of the advertisers shared with the government. whatever maximizes my if there is no tax, would also maximize 65% of my profits. same argument works with respect to research and development. what about with respect to putting in place a new fat jury or a new building clinics the last couple of years with respect to the news that tree, we let you write that investment up in the first year. we do not do that going forward. we require you to depreciated. so there is a sense in which the government to sharing more of your proffers and sharing of your costs. and that was a really big deal in the old days in the interest rate is high. but in the current world, for the interest rate is 2%, the fact that you have to do for your attacks -- depreciation tax for five years really doesn't reduce very much its value at all. so it is far from clear that the corporate tax is operating as a major deterrent to investment grade now. the most vexing issues to involve, as marty said, the question of international allocation, offshore income, all of that. and there you have to decide on which your philosophical approaches. we probably are caught in a bad middle right now and they're basically our two approaches that the world can take. one is you can basically give up and right now you say that with a lot of travel and absurd the irish touch standard and staff you can do investments abroad and not pay much taxes on non-and it's really not worth the people go to all that effort to remake it official. and that is that the territorial system does not reasonable argument. the alternative view is that we ought to attempt to crack down in serious ways on the allocation of income. we ought to raise questions about furl. we have to cooperate with other countries and so we don't have towards a world, where multinational income is taxed at a very low rate because of their ability to pay one jurisdiction against a matter, given the distribution of that income. so it seems to me that right now the u.s. tax system is like a library. we're running a library, this note dumbest thing you can do is announce that she'll have -- have everybody think there's going to be an amnesty on overdue books, but then not actually ever have the amnesty because then you assure that no books are ever going to come back there are was not bringing that the books, waiting for the amnesty and so you never get the money. that is that the u.s. debate is right now. no one in their right mind would bring in money inc. in who is going to know what happens next to be some kind of repatriation. even if you thought you ultimately have to bring the many home you'd surely be waiting right now. this is a debate, which my hope would be that the clearer it becomes in the direction of internationally collaborative efforts to tax incomes rather than avoiding seven pounds. the clarity in a different direction would be better than the current place, which ensures that the money will not be brought back and doesn't tax it and generates all the extra complacency. >> would have to persuade every other country to give up the territorial system and to crack down on their company. this seems very unlikely. >> can i say one other thing. larry was very careful to say some thing about short run versus long-run in terms of the corporate executive. yet the profits of a corporation in 2012 are not going to depend on the corporate tax rate, pretax profits and that's probably true in 2013 and therefore it's not surprising that if i'm the ceo of a corporation i would like to see those profits taxed at a lower rate. the real issue is what happened over the longer run. i think that is whereas economies we don't really know where that tax burden is going to fall and therefore relying on the corporate tax is to me a very strange way of raising revenues since we don't know who's ultimately paid. >> i need to move on to corporate tax. >> there is an issue you have to think about witches i don't know what that percentage is my and i guess it's on the order of 20% of u.s. corporate shares are owned by pension funds or endowments or foreigners in ways where there is no u.s. individual income tax page. and so it is one thing to say you should eliminate the corporate tax, but the income will be taxed anyway by dividends and capital gains. it is another thing to say that when the end come is held by the nebraska pension fund or the harvard endowment and it's going to be no taxation of rent income, you can say there's so much more capital accumulation that actually what feels like corporation isn't paying taxes, ultimately because there's so much more capital accumulation, profitability will be less than the economy and wages are higher in the economy comes the ultimately cutting the tax would benefit workers. that's a lot of steps. >> there's clearly a division there. the crackdown to summarize that connie used to be personal taxation, so capital gains and dividends, where one argument might be that sn 1986 they were equal. there's a pretty big gap. what direction should the taxation of capital gains ever go? schematics of the fundamental question is do and tax not just capital gains and dividends but increase as well to have tax as well and have a kind of mixed system. we say you put your money into an ira, you get a deduction. so they give you a deduction for savings. you put your money in a roth ira and don't get a deduction, but we don't tax the end comes from the savings. so for a lot of people, we have the system then in my judgment correctly doesn't tax the return of the savings or doesn't tax savings itself. i think there are two advantages to that. when is the kind of peer fairness of vantage. i might like vanilla ice cream and marionette like chocolate ice cream, but we think it's very unfair if we have a higher tax rate on vanilla ice cream then on chocolate ice cream because i'm the guy who likes the vanilla ice cream. but that is similar to weather when i a my man, i want to consume it today or set it aside and consume it in the future. and so, the tax law currently, unless you are in an ira situation or 401(k), it taxes people who want to consume their income leisure and want to save now and consume it later, taxes then at a higher rate than the fellow who wants to consume his and come now. so from a pure neutrality and fair pureness point of view. >> nobody pays rather those tax rates and get his income and region can. >> i want to stay with the legion can to begin with and say if i decide that in time, save some of it, consume some of it now, the interest, dividends, capital gains i get by postponing it is just a question of the timing of this spending is that income, just like the division of my income between vanilla and chocolate attacks i would've been mutual with respect to that. >> it depends on what examples you choose an murphy's point about the double taxation of savings is a fair one. but not the other kind of expand or you can imagine. imagine, zanny, do you start the next facebook. and her karachi's got some idea. you take your friends to loan you some money make an investment in you own a third of this thing in your garage. the moment you get to third, there's no income because the thing is not worth anything in your immunotherapy and worth a hundred billion dollars annually to have been worth $33 billion. many of us would feel that she should pay some taxes. but under the law, you've paid no taxes. now you might think that at some point you will want to diversify, you ought to sell your facebook., your zanny book stock, but if you have competently advise coming you will find ways to borrow money and be all too spent dirty one other $33 billion without ever incurring any tax liability. you might ask, what will happen if 60 years from now you die and get the money to your children. and then your children -- they don't care about zanny book. but they pay capital gains tax? the answer, no they will not pay capital gains tax. you have an issue around great fortune at a moment when the top 1% or 2% of the people own half the wealth in the country. large portions is a significant issue and you have to factor that into the discussion of the income taxation. i do not favor the idea that we should not have capital income taxation for reasons that i think though crucially to fairness. we can't, as a country, figure out that a guy who runs a private equity company is earning income by working. they let him call his income capital gain. and so in a country where he can't figure out how to do that, if we cut the capital income tax rate to zero, there will just be massive erosion of fairness of progressivity, so i'm not going into that agenda at all. >> let's look at your aside for a second. conversely i think that you do have to be realistic about these things that capital gains. and a current world, where we tax them only when they realized and when they don't try to -- where we allow them to entirely escape taxation if they are passed on their estates, the estimates of the joint tax committee and the estimates of the treasury are that the revenue maximizing tax rate is about 30%, raising the rate from 30% to 40%, you actually lose revenue. if the revenue maximizing rate is 30%, to sort of follows that raising the rate from 25% 30%, you'll impose a very large burden on people per dollar of revenue deal joined for the governor. so i think a thoughtful approach to capital gains taxation does involve recognizing the elasticities of realization behavior and does believe you to lower capital gains rates and certainly the race we now impose and certainly the top rates that we now impose. i'm less pleased with the case for reductions in dividends taxes because you don't have an issue like the realization issue and because we can't need to raise -- we do need to find ways for the same revenue. i do think that this whole area of escape erosion avoidance, all of that does require more attention than i am told by those who advise people much wealthier than i that good advice, the capacity to vary substantially avoid estate taxation is quite substantial and brief worms that address that issue would it seems to me be constructed without requiring higher martial race. >> i want to come back to the savings very briefly. there is also an efficient fee of distorting people's decisions to consume now are consume in the future and not affect dachas capital gains, dividends and interest. i think it is worth distinguishing between the person who in the background stars in a business and then has a cap road game and people whose capital gains, dividends and interest and we do that with iras and 401(k)s and roth iras. the question is should they be opened up? should they have the feeling they have now or should individuals who want to postpone the taxation of income via would've put it into an ira or pay the tax and then not the tax on the dividends, capital gains and interest by putting it in a roth ira? there's a strong case for fairness face and efficiency case for allowing that. there is a separate issue on whether you should be incentive to take time off of your current work to work on the zanny book technology by giving you the chance to get very rich from that innovation and that is certainly what the current law is designed to do. >> before i do that, one last thing we have it covered. from your initial remark, larry, it seems you didn't assign an enormous priority to the meeting tax expenditures and the whole debate about what should you get rid of them, give up the credit. very briefly, how high a priority should that be a crack this act to be capital? >> if you hurt me that way, i misspoke. i suggested that i did not believe the substantial base broadening done in the likely ways with produce a substantially simpler tax code. i do believe it would produce a substantially better tax code because it would be fairer and would avoid a variety of kinds of distortions that we have. and this is the place where marty and i would even agree matt. maggie has put forward a variety of proposals. the obama at has put forward ones that are somewhat less ambitious than marty's, that are directed at limiting the full use of all the existing deduction and the premise of both efforts is the strategy that you're better off attacking deduction and exclusions that the group then you are trying to choose which ones to go after anything that is a good thing to do. i think with respect to most of them, but not all of them, there's an oddity that if affluent individuals gives a dollar to charity, they get a 35-cent deduction and if the metal the metal and can than to be gives money to charity, they get a 15-cent deduction. so i went for the most part favor the conversion of the deductions and credits and then some limitation on the deductions. how best to do that you can debate the technical means, that i would be very much in support of base broadening. >> so when i typed about raising revenue, i said there's good ways and bad ways. raising tax rates in marginal tax rates is a bad way because whatever distortions are in attacks that they exacerbate whatever disincentives there are, in knicks versus wow. so what i would think should be done is to cut back on these tax expenditures, what subbase simply cause spending through the tax code. and since this been made, the government saying above we would like to encourage you to have a bigger house, a bigger mortgage, a bigger health insurance policy, we don't write you a check for that. we let you excluded or did that day, somehow it seems to be republicans and democrats that kabila come together around that. democrats say we want to raise revenue, republicans say we want to cut spending and marty saying to his republican friends, that is spending. it just happens to go through the tax code rather than the outlay side of the budget. and therefore we have to get the extra revenue that we need a cutting back on my spending. so this shouldn't be a decision -- political division between those who want to cut spending and those who want to raise revenue if the way we get the revenues by cutting tax expenditures. the specific way i think we should do it is to say keep all of the current tax six amateurs that she'd have, on the deductions, excludes them of health insurance, but she just can't be too greedy about it. you can't take too much of the tax savings from it. so you add up at the tax savings would be for them all at scheduled deduction, one line on the tax return and your health insurance exclusion and if that exceeds some percentage of your adjusted gross income, that access is not allowed. so everybody gets to keep all the current tax expenditure benefits, but only up to a certain amount. and i've done the calculations on not, putting the cat of 2% and that produces roughly the same percentage extra tax every broad adjusted gross income class. it doesn't change the progressivity of the system, but produces an enormous amount of revenue. does you could start with a less binding cap. you could face it up over time. i wouldn't put it in next year for the reasons that larry said because of the can earns about cyclical situations. >> also than avoid the fights between which types? let's go to questions. we have very little time to pull together. gentlemen in the fourth row on this site. we can just wait for the microphone. [inaudible] >> i'm a retired individual. i'm very concerned about inflation and my net worth. in my corner but it's unfair is the fact that long-term capital gains whether his houses or sacks are earned are not indexed to inflation and i'm curious to hear some comments about that. >> i did say in the opening remarks that one aspect of the fairness of those, don't take into account capital gains that wouldn't be hard to do if we continue to have the capital gains tax. >> i think you are right in principle on capital gains. i've noticed every time there's rather more than the xeon son for recognizing the inflation component of capital gains and there tends to be for recognizing the patient elements of interest deductions. of course on the same principle that one does it for capital gains, one should do it for interested action and i think there's a reasonable case for doing it. it would be surprising to me if the country had thought about doing this and decided not to do it at a moment when we had five, 6%, 70% inflation with out gravitate to this issue, a moment when inflation is very, very low. >> cheaper now. >> next question. >> i heard a lot of talk about base broadening and i just want to know if you both favor taxing harvard and harvard endowment as part of our base broadening of. as tax expenditure they are. >> i wouldn't call that a tax expenditure because we have decided it is my texaco entity. it was not a question of the measurement of the tax bill and come, but whether or not their income should be taxed. there is the broader question which is how we should treat a nonprofit in this country. should we allow contribution to harvard and museums, symphonies and all that. there's two choices. we can do it the way we do it in this country or we can do what europeans do and make those government financed organizations. the universities, museums, symphonies and so on. and i think the diversity and the way we do it in this country is reputable. >> gentleman here. >> question for professor feldstein. a great many republican have signed up for pledges not to increase taxes and as i understand that those who promote the pledge and clue filling in the polls on anything other than a revenue neutral way. given what she said today, does that worry you, it do you see a way of financing that? the mac some republicans i've talked to think that even though they signed up for that kind of an agreement if there is a tax reform, which is pro-growth, tax rate lowering comment that even though it raises revenue, they can go along with it. so i hope once we get past the election and people move from their hardened positions both with respect to entitlement on the democratic side, with respect to tax revenue on the republican side, we will see an operational way of dealing with this problem. >> i'm afraid ragtime and that's actually an appropriate place to hang. it seems to me we've had an extraordinarily interesting discussion, but one of those from two different days there's actually a lot of agreement. a lot of difference in emphasis that a lot of agreement and hopefully the next panel because some are concrete flesh on that in terms of what we actually get to in the next few in terms of a concrete tax reform. thank you very much indeed. [applause] >> the libertarian party holds its 2012 convention this weekend in las vegas to pick its presidential nominee. c-span's coverage begins tonight at 9:00 eastern with candidates for the libertarian party for the convention. >> bisbee concept to our guest is set to become a director and producer of the documentary on charter schools. it's called "the lottery." >> host: madeleine sackler, what was your immediate reaction when you read in "the new york times" that first sentence of your review when jeanette casillas said with a little tweaking the lottery, your documentary fit nicely into marketing materials for the highlands success academy? >> guest: i mean, it's an unfortunate description. i talked to families in the film that link because this is a film really about them and their experience and i think all of them were little bit hurt that bad because this is a true story. these are real kid that are experiencing something very difficult and the families are experiencing something very difficult. so i think to reduce that to propaganda or calling an advocacy or something like that is a little unfair. >> host: what is that? >> guest: the film? the film was called "the lottery" at about four families from harlem and one the bronx who enter their children's into a lottery for the school in harlem. unfortunately thousands and thousands of families are going through the process every year and our chances are about one in seven. initially we're excited to make a film solely about that, for families, a poor shed and experience. we found there is political controversies surrounding that process and a particular school they were trying to get their kids into a not a concert at the second story line and the film. post a list watch a little bit and i see similar questions.
CSPAN
May 15, 2012 5:00pm EDT
mr. reid: madam president? the presiding officer: the majority leader. mr. reid: i move now to proceed to calendar number 365. the presiding officer: the clerk will report the motion. the clerk: mr. reid moves to proceed to calendar number 365, s. 2343, a bill to amend the higher education act of 1965 and so forth and for other purposes. mr. reid: madam president? i move to proceed to executive session to consider calendar number 646, jeremy stein, of massachusetts to be a member of the board of governors in the federal reserve system. the presiding officer: woup the clerk will report the nomination. the clerk: the senator from nevada, mr. reid, moves to proceed to calendar number 646, jeremy c. stein of massachusetts to be a member of the board of governors of the federal reserve system. mr. reid: madam president, i send a cloture motion to the desk with respect to the stein nomination. the presiding officer: the clerk will report the motion. the clerk: cloture motion. we the undersigned senators in accordance with the provisions of rule 22 of the standing rules of the senate hereby move to bring to a close the debate on the nomination of jeremy c. stein of massachusetts to be a member of the board of governors of the federal reserve stpeupl, signed -- system, signed by 18 senators as follows: reid, leahy, bingaman, coons, levin, wyden, nelson of nebraska, shaheen, blumenthal, boxer, feinstein, whitehouse, merkley, rockefeller and johnson of south dakota. mr. reid: i now move to legislative session. the presiding officer: without objection the senate moves to legislative session. mr. reid: i move to proceed to executive session to consider calendar number 647, jerome powell of maryland, to be a member of the board of governors of the federal reserve system. the presiding officer: the clerk will report the nomination. the clerk: nomination federal reserve system, jerome h. powell of maryland to be a member of the board of governors of the federal reserve system. mr. reid: i send a cloture motion to the desk with respect to that nomination. mr. reid: the clerk will report the motion. the clerk: cloture motion. we the undersigned senators in accordance with the provisions of rule 22 of the standing rules of the senate hereby move to bring to a close the debate on the nomination of jerome h. powell of maryland to be a member of the board of governors of the federal reserve system. signed by 18 senators as follows -- mr. reid: mr. president, i ask unanimous consent the reading of the names be waived. the presiding officer: without objection. mr. reid: i ask consent to waive the mandatory quorum required under rule 22 for both cloture motions. the presiding officer: without objection. mr. reid: mr. president, i want to express my appreciation for the good work done on this most important bill that just passed the senate, the ex-im bank. it was reported out of the banking committee, and senator johnson did a great job with his committee. in addition to that, the work of senator cantwell was exemplary. she is a terrific legislator. she gets her teeth in something, she won't let it go. and she would not let us take our eye off the prize, that is passing this important legislation. i have such admiration for her legislative skills and basically her legislative skills and want it spread across the record my admiration, and congratulate her on this legislation which meant so much to her and the entire country. mr. president, the national flood insurance program is set to expire at the end of may, this month. this program provides insurance coverage for almost six million people who live and work in zones, flood zones. the national flood insurance program is self-sustaining. for more than 40 years it's guarded american homeowners against flood-related disasters. the program expires, new housing construction will stall, real estate transaction will come to a halt, taxpayers will be on the hook for future disasters. we've not been able to bring flood insurance to the floor because we've had a lot of problems with senate procedure, that some believe is abusive, that's left us with so little time. as you can see, i filed cloture on two nomination for the federal reserve. i'll file later on a judge that's been waiting for almost a year. so, no one believes that there's enough time to pass conference and enact a long-term flood insurance bill before the end of this month. so we're in the situation we have to do another short-term extension. thus, i will seek to pass an extension of this important program now, and, therefore, i ask unanimous consent that the senate proceed to consideration of calendar number 366, s. 2344, which is an extension of the national flood insurance program. that bill be read a third time, passed, the motion to reconsider be laid on the table, there be no intervening action or debate. the presiding officer: is there objection? a senator: mr. president? the presiding officer: the senator from oklahoma. mr. coburn: mr. president, i object, and i will hold my comments until after the majority leader finishes his talk so i can explain my objection. you'd like for me to go ahead? i'd be happy to go ahead. mr. reid: i'm serious about this, i'm anxious to hear it. mr. coburn: we've had 13 short-term extensions to the national flood insurance program. that's over the past four and a half, five years. there's a bill set to be brought to the floor, and yet we're going to have a short-term extension again. this program is not financially sound, and it is not self-sustaining. it runs a $900 million deficit every year. what is the national flood insurance program? do we need it? yes. am i objecting that we need it? no. but the vast majority of the moneys that are expended by hardworking americans go to subsidize the insurance for homeowners' second and vacation homes. multiple times in the senate and in the house both have concurred that this should be taken away, this subsidy, for those in terms of second homes and vacation properties. and so what i would expect, if we're going to do an extension, then we ought to do an extension with something that both bodies have already passed, which includes making those people who have properties eight times the average value of the rest of the homes in the flood insurance carry their fair share of their insurance. and so i'm not inclined, no matter what happens to the flood insurance program, to allow us to continue to extend. i'd make one other point. we won't have time in december to fix this, with everything else that's coming up. so the time to fix this is now. and i won't object to coming to the five-year reauthorization to the floor. i don't think anybody on our side will as well. and we should address this, and we could be done with it. but another short-term extension is not what this country needs. we can't afford losing another $900 million-plus. the american taxpayer is on the hook for $1.3 trillion with this program right now, and the average subsidy to the average home is over $1,000 a year. so i have no objection to supporting those who actually need our help, who are in flood-prone areas. but those that have the tremendous benefit and the opportunity to have second and third homes -- and i think it's objectable that we continue to -- objectionable that we continue to subsidize their purchase of flood insurance. to that, i object. mr. reid: mr. president, before my friend leaves the floor -- the presiding officer: the majority leader. mr. reid: thank you. i would hope that we could do a five-year bill. as my colleague knows, the main impediment to the regular functioning of the senate this year has been the offering of irrelevant amendments. so i'm wondering if i could say through the chair to my friend, the junior senator from oklahoma, as to what kind of an agreement you think we can get on the number of amendments on something like this? mr. coburn: mr. president, i would respond to the majority leader through the chair to say i would help him in any way that i could with my side of the aisle to make sure that we had cogent amendments to this bill and also agree to a limited number of them since it is important that we reauthorize this program. mr. reid: how many? i say again through the chair to my friend, how many amendments do you think you would need? mr. coburn: one or two. mr. reid: i appreciate my friend from oklahoma. it's something i would like to be able to do, but we have so much to do. we've got the farm bill. we've got cybersecurity. we've got the f.d.a. bill. and i'm filing cloture on nominations. people have been waiting to change their lives. i'm so sorry that we can't legislate more. this is a bill -- i have sympathy with my friend from oklahoma. i don't agree with everything he said, but this is a program that needs to be changed, and i recognize that. so i will continue working with my friend, and maybe there's some way that we can work together to figure out a way to move this forward. it's really hard to -- what i would suggest is i would be happy to work on my side because senator johnson has talked to me twice today on this legislation, to figure out what amendments my folks might want to offer, because they want to offer amendments. if my friend from oklahoma would also make a decision on his side, as he indicated, cogent amendments, relevant amendments, we could put this in a little package and move to it without my having to file cloture and do these amendments. i'd like to do that. i'll work on my side to find out what amendments there are. and if my friend would do that, on monday or tuesday we'll talk about this and see if we can get a very concise agreement to do this important legislation. and my friend is not denying that. but i think we do have to make some changes in it. i'm happy to move forward. i think the house is going to take something up pretty soon. i yield the floor, mr. president. the presiding officer: the senator from oklahoma. mr. coburn: if the senator from new jersey would give me the courtesy of five minutes just to speak as in morning business and then i'll be through. i appreciate what the majority leader has said, and i will work my side of the aisle to see if the possibility of moving this is there, and will give it my 100% effort between now and next monday when i see the majority leader, to see if we can't do it. i would make a couple of points. our nation's in big trouble, and we're not acting like it's in big trouble. and it seems that the way we're operating is from crisis to crisis. that's not good for the country. it's not good for the agencies. it's certainly not good for the individuals. and it makes it to where we actually can't do effective legislating. the idea behind the flood insurance program is almost 50 years old. there's nothing wrong with its intent, but we can't afford $900 million a year in subsidies to the very wealthy in this country for their second or vacation homes. and so it is time to, if we're talking about fairness, as the president talks, then it's time to reform this program, whether it's an extension or not, this component of it, where there's a fair premium, where we're not subsidizing those that can in fact take care of themselves in this country. and whether it's this bill or the farm bill, where we're subsidizing 4% of the farmers with 60% of the crop insurance premium, it's the same issue. and so i look forward to working with the majority leader, and i will do my part to try to gather up the amendments that might be there and work with our leadership to try to be able to bring this bill to the floor. thank you. and i thank the senator from new jersey. the presiding officer: the senator from new jersey. mr. menendez: mr. president, i rise to speak about the violence against women act that the senate passed, but we seem to have a challenge with our colleagues in the house of representatives. in my view, violence against any woman is still violence. and apparently my republican colleagues in the house do not share that view. republicans in the house have introduced a bill that would not protect all women. their bill would roll back protections for certain vulnerable populations. it would strip provisions in the senate bill that protect women from discrimination and abuse, specific khreurbgs native -- specifically, native american women, the lgbt community and undocumented immigrants. it rolls back protections they have under current law. mr. president, we've seen that violence against women is an epidemic, and it plagues all of us, not just some of us. we have fought against it. we have tried to end it. we have established programs and policies at the national and state levels to mitigate it. we have stood with the victims of domestic violence. and now we must stand up and reaffirm our outrage. it is, in my mind, a no-brainer, and i am, frankly, hard pressed to understand why anyone would stand in the way of denouncing violence against any woman. no matter who they are, no matter what their orientation or citizenship is. i am hard pressed to understand why anyone would choose to exclude violence against certain women, turn back the clock to a time when such violence was not recognized, was not a national disgrace, and make a distinction when and against whom such violence meets our threshold of outrage. there can be no such threshold and no such distinction. violence against any woman is an outrage, plain and simple. and so is the message to be that we are willing for some reason that in my mind defies logic to accept violence against certain women, because that seems to be the message the other body is sending us. mr. president, i cannot believe that anyone would take such a position, but that's exactly what we would do if we listen to our republican house colleagues, and that, mr. president, is completely unacceptable to this senator and should be unacceptable to every member of congress and every american. if our friends on the other side deny that they are waging a political cultural war against women, then why, mr. president, are they willing to accept an actual war against certain women by excluding them from protection under the violence against women act? the reauthorization of the violence against women act doesn't just affect those horror might become victims of sexual violence or domestic violence. it affects all of us. nearly one in five women report being the victim of rape or attempted rape. one in six report being stalked. one in four women report having been beaten by their partner. of those who report being raped, 80% report being raped before the age of 25. the short-term physical and emotion trauma of such an event cannot be overstated. domestic and sexual violence is an issue that affects us all, and we must be all part of the solution. since 1994, the violence against women act has been the centerpiece in our comprehensive approach to protect and empower women, and it must remain so. since the passage of faw in 1994 -- of fawa in 1994, there has been enormous positive change. from 1993-2010, the rate of interparliamentary violence declined. more victims are reporting violence to police and those reports are resulting in more arrests and prosecutions. vawa is working but there are still women who need protection. for example, in one day in new jersey, a survey found that domestic violence programs assisted 1,292 victims. on that same day, new jersey domestic violence hotlines answered 444 phone calls. so i will -- our work on this issue is not yet done. and looking to the merits of the reauthorization, let me highlight for the record several critical changes in the legislation, changes that did not simply extend successful programs but built upon them. every reauthorization of the violence against women act has incorporated new understandings and updated knowledge, and this reauthorization was and should be no different. first and foremost, the senate reauthorization includes additional training for law enforcement, victim services and courts that increase the focus on high-risk offenders and victims, including connecting high-risk victims with crisis intervention services. i'm sure no one can argue against that. second, the senate bill strengthens our response to sexual assault while increasing the connection to nonprofit groups. sexual assault coalitions in every state have been indispensable allies. i met with a large roundtable before our debate and discussions here in the senate, and this bill support theirs efforts. it included a 20% setaside in assistance to states for sexual assault programs and included reforms to reduce the unprecedented backlog of rape kits. now, i have been proud to support funding to reduce this backlog. just recently, i supported senator leahy's effort to fund the debbie smith d.n.a. backlog grant program at the current level of $125 million with at least $90 million directly spent on reducing the d.n.a. backlogs. and i'm happy to say that the violence against women act will make important strides to reduce the backlog. most importantly, given the debate on this legislation, this reauthorization recognizes that domestic and sexual violence affects all groups, regardless of their sexual orientation. we included commonsense protections against discrimination on race and religion, national origin, sexual disability because it is quite simply the right thing to do because all violence against women is an outrage to all of us. for the first time, the senate bill established the fundamental notion that victims cannot be denied services based on gender identity or sexual orientation. we included provisions to protect immigrant victims of violence and native american victims. in the senate, the bill passed 68-31, with a dozen republicans voting in support of the final legislation despite republican attempts to weaken the bill during the senate's consideration of the legislation. unfortunately, republicans in the house are attempting to weaken the bill and do what a minority in the senate could not, and for the first time in the nearly 20-year history of the violence against women act, the house reauthorization doesn't expand protections. in essence, it actually instead eliminates a series of them. in its version, the house sent an undenial message. if you're a native american, if you are lgbt or undocumented, you do not deserve protection. that is the house message. to start, lgbt victims do not receive the protection they need in the house bill. professionals in the field specifically requested nondiscrimination provisions based upon their direct experiences. studies on the issue only confirm this need. 45% of lgbt victims were turned away from domestic violence shelters. 55% were denied protective orders. the senate version ensures all victims, gay or straight, share in the protections. the house version denies these critical protections to lgbt victims. under the house legislation, immigrant victims of violence would fare far worse than under current law, far worse than under current law. domestic violence advocates tell us that often abusers threaten their significant others with having be brought to authorities and with the possibility of deportation unless they continued to submit themselves to dangerous and inhumane treatment. the violence against women act provides a way out. the house version of that law does away with confidentiality protections for immigrant victims. studies have shown that victims are most vulnerable immediately before or after they leave the abuser, and vawa protects these victims with confidentiality when they come forward to seek help. the house version instead creates a cruel possibility that in seeking help, the victim will be exposed and face more abuse. how perverse is that? house republicans would put burdensome new requirements on immigrant victims and give them less help than they receive under the current law. the abuser often possesses the relevant evidence while the abuse faces language barriers, isolation and limited access to legal representation. in past debates of the violence against women act, we have had wide bipartisan consensus around protections for these victims because a victim is a victim is a victim. but the house reauthorization ignores this consensus and places an unimaginable burden on self-petitions. under the house proposal, the program could protect immigrant victims called the u-v.c.r. program would be a hollow shell of its former self. the permanent visa would now be temporary, reducing the incentive for immigrants to take the risk and assist law enforcement in identifying the abuser, in identifying the person who may have committed a sexual rape. of course, proponents claim that these reforms are needed to --quote, unquote -- combat fraud in the system. but i have to ask what fraud? to obtain a u-visa in the first place, law enforcement personnel must personally sign off. is there some suggestion that the law enforcement personnel are engaged in a fraud? there is no evidence of fraud in this program. the simple enforcement technique has proven profoundly effective, yet the house insists on adding additional burdens on a vulnerable population, only to fight a nonexistent problem. moreover, allowing these abusers to go free puts more criminals in our community who can then victimize more women in the future. our whole goal here is to end the abuse and to get the abuser to ultimately face up to their punishment, and instead, we would say oh, no, let the abuser go ahead and continue their abuse and we will subject the victim ultimately to a set of circumstances in which not only will they not come forth and talk about the abuse, we will subject the victim ultimately to facing even greater challenges in their lives. knowing what is at stake and what it would mean to the many victims of domestic violence and sexual violence, there is no question we must pass final legislation as soon as possible. the debate, mr. president, should be about one thing and one thing only -- protecting victims, all victims, and each and every one of these women in these categories are, in fact, victims. there should be no differentiation and there should be protection for all. with that, mr. president, i yield the floor. a senator: mr. president. the presiding officer: the senator from kansas. mr. moran: i ask unanimous consent to address the senate as if in morning hour. the presiding officer: without objection. mr. moran: thank you, mr. president. earlier today, i attended a memorial service to honor our nation's law enforcement officers who laid down their lives to protect their fellow citizens. since 1962, may 15 has stood as a day of remembrance for the many fallen police officers who faithfully served our communities and our nation. they must never be forgot. this year, 362 names were added to the national law enforcement officers memorial, and among those names were three brave officers from kansas. two of these men died in the line of duty many years ago, but we pause today to remember their sacrifice. in 1892, and drew balfour of kiowa county was fulfilling his duties as a local sheriff and pursuing a man who was wanted for theft when he was mortally wounded. andrew passed away at the young age of 41, leaving behind a wife and six children. in 1922, william bloomfield, a deputy sheriff serving in bourbon county, was arresting a well-known criminal when he was killed during a fierce gun battle. these two men honorably served by faithfully carrying out their duties. rather than shirk from danger, police officers pledged to face danger with courage, and that is exactly what these two men did. just five months ago, kansans were grieved by the loss of another officer, sergeant david ensbrenner of achison, kansas. on december 9, 2001, david joined a fellow officer on a routine call to see a local resident. as they were turning to leave the front step of the home, a person suddenly appeared and opened fire on david without warning. this act of violence was unprovoked and forever robbed the ensbrenner family of their father and husband and the achison community of a loyal public servant. when we lose someone in a community in kansas, it's not just a name to us. it's somebody we go to church with. somebody we see at our kids' activities at school. somebody we know and care for. that is how achison felt about david. in remembering david, achison mayor alan rivas said this -- he was number one father, number one husband, number one partner to his fellow officers, number one son. en scribed on the national law enforcement memorial here in washington are these words -- it is not how these officers died that made them heroes. it is how they lived. police chief mike wilson served alongside david for 24 years and said this about his former colleague and friend. those words speak directly to david, those words on the national law enforcement memorial. those words speak directly to david. how true about our brother. david was dedicated to his family, his fellow law enforcement officers and his community. he was well known in afternoon issonson and well -- afternoon issonson and well loved. he served in the afchison police department for 24 years. david was on the board of trustees of his local church and found great joy in teaching and coaching his daughters on their softball teams. last be december i witnessed the impact david had on the community when i attended his memorial service and more than 2,000 people gathered to pay their respects to him. during the service, many moving tributes were read about david and how he lived his life, but one that stood out from among the others was a statement from david's wife, kerry. she said this about her husband: david was a man of few words. he always tried to keep a simple life and when i questioned things he would remind me it's okay sometimes not to understand. we don't fully understand, don't want understand at all really why david's life was taken nor why the lives of more than 19,000 officers we remembered today ended so soon but we want to express our gratitude for their service and dedication to their communities and to our country. during national police week, we also remember their families and the loved ones they lefd behind. may -- left behind. may god comfort them in their time of grief and be a source of strength for them. may he protect all those who continue to serve us today. i want to especially mention david insbrenne wrench r's wife, kerry and their three daughters. i want them to know we honor the way david lived his life and tell them that we love and care for them today and always. i yield the floor, mr. president. the presiding officer: the clerk will call the roll. quorum call: the presiding officer: the senator from new hampshire. mrs. shaheen: mr. president, are we in a quorum call? the presiding officer: we are. mrs. shaheen: i ask that the quorum call be lifted. the presiding officer: without objection. mrs. shaheen: thank you. i come to the floor to join my colleague, senator menendez and i think some of our other colleagues who will be here soon to reaffirm a commitment to the reauthorization of the violence against women act. that act recently passed out of the senate with a strong bipartisan vote that recognizes our bipartisan commitment here to end domestic and sexual abuse, stalking, and dating violence. the house of representatives will soon be taking a vote on their proposed counterpart to the violence against women act, and i want to address some of the concerns that i have with the bill that is on the floor in the house. what we've seen in this country is that domestic violence has a significant impact on families, on victims, it compromises the very stability of our towns and communities. the violence against women act provides essential resources for victims and for law enforcement. and i was pleased to see so many of us here in the senate put politics aside and support this important reauthorization. unfortunately, the house version of the reauthorization of the violence against women act does not provide the same level of protection for victims, and it does not include some resources that have specifically been requested by law enforcement. in the house bill, protections are diminished for college students, for lesbian, gay, and transgendered victims, for immigrants, and for native americans. the senate bill strengthens the violence against women law to provide the -- the violence against women act to provide more protections to women and their families. the house bill weakens the law by failing to state that same-sex couples will have equal access to services, by decreasing protections for immigrant victims and die declining to expand the jurisdiction of tribal courts. one example of some of the changes in the house bill where i think it fails, is around the protections that the senate bill provides to women students on college campuses. the senate bill provides strong protections that have been oamented in the house bill. -- oament omitted in the house bill. the senate bill requires a university to implement prevention programs, teaching all students, male and female, how to help prevents sexual violence and dating violence, including bystander education. the senate bill also requires a university to make reasonable accommodations for a student who needs to change their living, working, or academicking situation as a result of being victimized. for example, if a young woman is a victim of an assault and her attacker lives in her dorm, what the senate bill would do is require the university to help that young woman find another place to live. unfortunately, these kinds of protections are not included in the house bill. the department of justice recently 12345eu9 smaited that 25% of college -- recently estimated that 25% of college women will be victims of rape or attempted rape before they graduate within a four-year college period, and that women between the ages of 16-24 will experience rape at a rate that's four times higher than the assault rate for all women. there is no doubt that this is a serious problem. and the safeguards that we implemented in the senate bill must be preserved if we're to provide the protections that young women and men in college deserve. when we were working on our reauthorization here in the senate, i had a chance to meet with case workers at crisis centers and with some of the victims of domestic violence in new hampshire. i heard from one woman who said that if it hadn't been for that 24-hour hotline and her caseworker at the bridges crisis centers in nashua, she would never have been able to leave her abuser. she was finally able to stand up for herself and end the terrible cycle of abuse because of the violence against women act. all victims should have equal access to these important resources, and it is imperative that this bill provide that. so i urge my colleagues in the house to insist on these essential components so that can move forward on this reauthorization and we can protect all the victims of domestic violence. thank you, mr. president. i yield the floor. the presiding officer: the senator from indiana. mr. coats: mr. president, i rise this evening to honor a long-time friend, a confidante and mentor, check coalson, whose life we will celebrate tomorrow at a memorial service at the national cathedral. it's been said that a man's character can be attested by the way he responds to adversity. if that is the case, chuck coalson's character was one of remarkable strength, tenacity, faith, and humility. chuck was a brilliant man with a resume of impressive accomplishments at a very young age. a scholarship to an ivy league school, a law degree from george washington university, a veteran, and at one time the youngest captain in the marine corps. a former chief of staff to a u.s. senator from massachusetts, and then top assistant and legal counsel to the president of the united states. now, this doesn't sound like the type of man that we would find himself sitting alone in a federal prison cell, but that's exactly what happened to chuck colson and what happened there changed his life forever. known as president nixon's hatchet man, colson pleaded guilty to obstruction of justice in the daniel elseburg case in the watergate scandal and went from white house special counsel to incarcerated felon. in fall, from a confidante of the president of the united states to a federal prison cell is about as far and as deep as anyone could fall. that's what we call hitting rock bottom. but rock bottom for chuck colson became a time of repentance, a time of grace, and a time of transformation. far from the rose garden, he was behind those prison bars where chuck colson made one of the most important decisions of his life, one that would impact the lives of thousands. he decided to dedicate the rest of his life serving the god that he loved. the scripture in proverbs reads trust in the lord with all your heart and lean not on your own understanding, in all your ways submit to him and he will make your paths straight. with redemption that can only come through the grace of god, and with a renewed sense of vision, chuck did just that. he put his trust in the lord and submitted to him and he disiet decided to let god write the story of his life rather than try to control his own destiny. that transformation is the story that we will celebrate tomorrow at the national cathedral. a story of redemption and a testament to the power of god's forgiveness and love. chuck colson's experience in prison and his renewed sense of vision opened his eyes to a sector of our society that is often forgotten. once a prisoner himself, and having experienced the depth of his own need for repentance and transformation, even those at the very bottom of society, chuck blesd that god could change them and any willing heart. as described in the first two of his many published books, the first one "born ghen" and the second" life sentence" chuck dedicated his life to serving inmates and the families of prisoners. in 1976 he practiced what he preached and founded prison fellowship, a christian ministry to give prisoners the opportunity to experience the radically transforming power of christ that he had experienced himself. chuck colson's ministry took him to visit 600 prisons in the united states and in 40 other countries. he worked relentlessly to improve prison conditions, increase access to religious programs, and to provide resources in support to the families of prisoners. prison ministry was not his only passion. in his later years chuck focused his efforts on developing other christian leaders who could influence their communities through their faith. this became the cornerstone of the chuck col center for christian world view, a research and training center established to promote christian world view teaching. chuck has touched many lives of many people, through his ministry, books, lectures, and charity work and i am one of those who is personally grateful for the positive influence he has had on my life. he was -- it was in april of 1976 that i was -- that i attended an annual fort wayne, indiana, mayors' prayer breakfast. i was intrigued with the speaker who was announced as chuck colson, recently released from prison, formerly a watergate figure and legal counsel to the president. as i sat through his presentation, i was touched in a way and reached in a way that transformed my life, and i am ever grateful to chuck colson for using himself as i think a conduit of a message that i also needed to receive. it resulted in a radical change of course for me, from a predictable, settled, purposeful, i thought, life, as an attorney and a -- in a mid-sized firm in fort wayne, indiana, to becoming engaged in politics, something i never thought i would engage in, it was chuck colson that made me ask that same question and make that same decision that he made, and that is to no longer try to control the direction of my life, but subject myself to the control of someone who had a plan for me. and that plan was not a specific serving in the senate or congress. it was simply to be open to the possibility of a path that perhaps i had not ever thought would be taken. as a consequence of that and as a consequence of a string of events that is impossible for me to claim any credit for, i find myself standing here in the united states senate, delivering his tribute to chuck colson. marsha and i will miss him greatly and we will continue to be motivated and inspired by the example of how life should be lived. when i first came to the senate, i was here just two days and i received a call from chuck colson. he said, i have a gift for you and it is a precious gift and one i don't want to give, but i think this gift can be more useful as someone who can speak as a united states senator than someone like me who can speak as a head of a prison fellowship. that gift was a young man by the name of michael gerson, who had after leaving college worked for prison fellowship, helped both through policy decisions and through the written word, helped chuck with his ministry. and this young man worked for me for a number of years and was -- i was the voice of his thinking and the voice of his written messages. he went on to become a speechwriter for a presidential candidate and then chief speechwriter for president george w. bush. michael gerson wrote a piece that was published in "the washington post" on april 22 entitled "charles colson found freedom in prison." that piece, i think, is worth certainly reading and, mr. president, i would ask unanimous consent that it be inserted in the record peedly follopeed --immediately followi. the presiding officer: without objection. mr. coats: mike gerson said, "chuck led a movement of volunteers attempting to love some of their least lovable neighbors. this inversion of social policies and priorities putting the last first is the best evidence of a faith that is more thank a crutch, opiate, or a self-help program; it is the hallmark of yo authentic religin and it is the vast humane contribution of chuck colson. chuck colson's remarkable life story can serve as a guiding light and provide all of us the courage and strength to overcome whatever adversity we may face in our own be lives. may we remember the example of chuck colson and in the words prayed so often by my very dear friend, "please show me how you want me to live and give me the power to live that way." mr. president, i yield the floor. and i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: quorum call: quorum call: mrs. murray: mr. president? i ask unanimous consent the quorum call be lifted. the presiding officer: without objection. mrs. murray: i ask unanimous consent to speak as if in morning business. the presiding officer: without objection. mrs. murray: thank you, mr. president. it's very hard to believe that today marks exactly two months since i first came to the floor to advocate passage on the senate's version of the violence against women act. i was very encouraged to see our body finally come together and eventually support this important legislation. the violence against women act has helped provide lifesaving assistance to hundreds of thousands of women and their families, and it certainly was a no-brainer to make sure all women had access to that assistance. however, i was very disappointed to learn that a day after we passed it, the house republicans pulled an immediate u-turn and introduced their version of the bill that would undo the commonsense progress we made. the house republican version of sra*u -- vawa is a giant step backward, dangerous and irresponsible and leaves women across the country more vulnerable to domestic abuse. not only do they remove important protections that would be created by the senate version of the bill, they actually strip existing protections already provided by this important law. in fact, it removed critical protections for lgbt victims. it does very little to address the epidemic of sexual violence in our communities. it removed critical protections already in place for students on college campuses and it rolled back protections for immigrant victims. mr. president, we've made a lot of progress since vawa was first passed in 1994, and i hope no one will insist on putting partisan politics ahead of protecting victims of domestic violence. where a person lives, who they love, what their citizenship status may be should not determine whether or not their perpetrators are brought to justice. the senate bill that we passed last month builds on what works in the current law. it improved what didn't. it continues on the path of reducing violence towards women. and it should not be controversial. mr. president, it's time for the house republicans to come to their senses, support our bipartisan bill so that women and families in this country can get the resources and support that they need. thank you, mr. president. i yield the floor. i suggest the absence of a quorum. quorum call: quorum call: quorum call: the presiding officer: the majority leader is recognized. mr. reid: i ask unanimous consent the call of the quorum be terminated. the presiding officer: without objection. mr. reid: i ask consent the senate enter a period of morning business with senators permitted to speak up to ten minutes each. i ask that we proceed to senate resolution 460. the clerk: designating the week of may 26, 2012 as national public works week. the presiding officer: is there objection? without objection. mr. reid: i ask unanimous consent the resolution be agreed to, the preamble be agreed to, there be no intervening action or debate and the statements placed in the record as if read. the presiding officer: without objection. mr. reid: and by say before we leave this, mr. president, senator inhofe and senator boxer, the chair and ranking member of that most important committee, environment and public works, this is national public works week and this is good because during this week we're doing our it most on a bipartisan basis to complete the conference with the house to get the highway bill passed, 2.8 million jobs. that would be a big celebration for national public works week if we could get that bill done. and i appreciate very much boxer and inhofe working so closely together on that committee. i ask unanimous consent we proceed to s. res. 461. the presiding officer: are can the clerk will report. the clerk: senate resolution 461 recognizing the teachers of the united states for their contributions to the development and progress of our nation. the presiding officer: is there objection to proceeding to the measure? without objection. mr. reid: mr. president, i ask consent this resolution be agreed to, the preamble be agreed to, the motion to reconsider, there be no intervening action or debate and any statements he relating to this matter appear in the appropriate place in the record as if given. the presiding officer: without objection. mr. reid: mr. president, yes, 3187 was introduced earlier today by senators harkin and enzi, and i ask for its first reading. the presiding officer: the clerk will read the title of the bill for the first time. the clerk: s. 3187 a bill to amend the federal food, drug and cosmetic act and for other purposes. mr. reid: i ask for its second reading but object to my own request. the presiding officer: without objection. the presiding officer: objection is heard. the measure will be read the second time on the next legislative day. mr. reid: mr. president, very important piece of legislation done in the right way. senators harkin and enzi have done something in the way we always used to do things. they moved a bill out of committee to the senate floor. truly a bipartisan bill. so important to our country. the fadz bill. food and drug administration. and senator enzi has always been very, very foikdz on -- focused on when we bring something to the floor it must have a committee mark on it and this bill does. mr. president, the reason i moved to the bill the way i have is to line this up for filing cloture on thursday. i hope we don't have to file cloture on this. to proceed to it. why don't we get on the bill. we could get on the bill, start on it monday, we could start offering amendments and get this thing moving along. i've talked to senator enzi, talked to senator harkin, we had really good luck on the highway bill, we had good luck also on the postal bill, relevant amendments. this is a very important piece of legislation. i hope we can move to this without having to file cloture. if i have to file cloture i'll have to file cloture, but i sure hope not. i really admire the cooperation and the working together of senators harkin and enzi. mr. president, i now ask consent when the senate completes its business today the senate adjourn until 9:30 a.m. tomorrow morning, may 16, following the prayer and the pledge, the journal of proceedings be approved to date, the morning business be deemed expired, the time for the two leaders reserved for use later in the day. i now --. the presiding officer: without objection. mr. reid: thank you. mr. president, following leader remarks, tomorrow morning the senate will begin debate on several motions to proceed to senate -- to resolutions introduced by republican senators. this is an agreed-upon method of proceeding on these resolutions. it's my intention to equally divide the first hour with the majority controlling the first 30 minutes, republicans controlling the second 30 minutes. so i would ask consent that be the case. the presiding officer: without objection. mr. reid: so we -- there is six hours of debate time allowed under the consent agreement approved earlier today. i certainly hope that we can get this done expeditiously. we'll have senator conrad will be leading the efforts on our side, opposed to this, and once we get this out of the way, we should move forward. mr. president, after tomorrow morning, after we understand that morning business will be deemed expired and time for the two leaders reserved for their use later in the day, i ask unanimous consent i be recognized at that time. the presiding officer: without objection. mr. reid: if there is no further business to come before the senate i ask that it adjourn under the previous order. the presiding officer: the senate stands adjourned until senate stands adjourned until instead accelerated plans for back up oxygen system for the f-22 fighter jet. some f-22 violence of experienced dizziness and other symptoms of oxygen deprivation while flying but the air force does not know what is causing the problem. spokesman john kirby and george little brief reporters this afternoon for about 40 minutes. >> good afternoon and thank you all for coming. we will make a brief statement and then open up for a round of questions. the secretary has been closely following developments with the air force f-22 fighter and the experience by f-22 pilots. as most advanced fighter aircraft the capability provided by the fifth generation f-22 are important to maintaining our air superiority national security objectives for the protecting air space or the united states for deploying overseas as part of our deterrence and the engagement efforts. secretary panetta's supports to the measures taken so for the by the air force to pursue all plausible hypotheses and the rich causes of the symptoms experienced by the f-22 pilots. however, the safety of the pilot's remains as first and foremost concern. therefore in addition to those measures already taken by the air force to mitigate risks to the pilots they are forced to take three additional measures. first, the air force will expedite installation of an automatic backup in all f-22 fighters. second, effective immediately all f-22 flights will remain within the proximity of potential landing locations to enable quick recovery and landing show the pilot and counter unanticipated physiological conditions during flight. that means long duration airspace control flights in alaska will be performed by other aircraft. third, the air force will provide to the secretary a monthly progress report as it continues to pursue aggressively the discovery of the root cause of these events. secretary panetta believes the department must do everything possible to ensure pilot safety and minimize flight risks. he will continue to closely monitor the air force's efforts to enhance the safety of this jerry important aircraft. bob? >> george, on that topic, just -- does the secretary consider grounding the aircraft again? and also, does this restriction on the proximity of the landing site affect the deployment of the f-22 that are in the middle east at the moment? >> the secretary believes this is the prudent course of action to take up this time. as i indicated, he will be receiving regular updates, and all options remain on the table going forward. in terms of the deployment in southwest asia, we believe that we can safely continue that deployment given the geography of the region. >> why not just ground the fleet until you know what's causing the oxygen problem? >> well i think george sitwell, the secretary believes this is the prudent course right now. it allows us to continue to examine the aircraft closely and to try to figure out what happened. there's a troubleshooting process that's going on right now so the air being a system that process these mitigated the risks as much as possible and the safety of the flight is paramount. the secretary will continue to get updates and as he estimates future decisions about the fleet will do that, but right now he believes coming and he has been briefed very recently on this very deeply, he believes this is the right course right now disconnect the pilots that were interviewed on "60 minutes stuff quote address the issue have air force says the need to take tests from flights to figure out the problem is. they describe themselves as guinea pigs. how do you ensure that airmen were flying are not being used as guinea pigs? >> to refer to a fighter pilot in the united states as a guinea pig. the highly trained, highly skilled and we value their expertise. frankly that service and expertise is critical to helping us figure out what the problem is here. >> on the same topic, this quick recovery issue -- what is -- how far can they fly easily under the new guideline? you said that they don't do any long duration flight. so what's their limitation now? >> i believe it's situational more than anything, justin. i don't believe there is a nautical mile limit. it's just about appropriate level of proximity to the strips so that if they needed to get down in an emergency they could in a relatively easy quick fashion but there hasn't -- there's not a mile radius spigots' about proximity that strips in alaska that they have to be aware of landing strips and plenty of to accommodate the landing? >> the strips have got to be -- the have to be capable of handling that type of aircraft. absolutely. but it's about the general proximity here. >> what about the comments on the ground? >> the secretary will be receiving regular updates and once these problems are addressed, sure he will make further decisions in concert with the air force leadership. estimate is the secretary satisfied with how the air force has been handling this? and number two, how well the defense department go about finding of the attitudes and the concerns that all the pilots have who fly the f-22? >> it's safe to say the air force leadership shares a sense of urgency on these issues. and more broadly, he is deeply concerned about the pilot safety. and that's a paramount concern for him coming and he believes it's a paramount concern, obviously, for air force leadership, too. so going forward, that's going to be a key metric, i think i will drive his decision making on this and other matters related to aircraft and other equipment in the u.s. military. >> [inaudible] -- how do you gauge their attitudes, are you going to figure of -- in other words is very concerned -- does he have a concern that the other f-22 pilots perhaps their concerns haven't been everest -- >> one of the to drivers -- drivers of his concerns for quite some time has been the expression of pilots by reticence to fly the aircraft. so that has figured into this decision to direct these actions to date. he is very concerned about pilot safety and he wants to do because safety concerns to be addressed all levels of command for the proper channels and that's the direction he wants to ensure that we head into the >> so is this a direct response to what is expressed on 60 minutes or have there been any instances of reports a we don't know about since then or can you tell us when the last one was? >> why don't believe there's any new ones since the prez reporting. it is the country's been aware of this issue and concern about it for quite some time. but in light of his decision recently to deploy the aircraft itself was a shot and then in light of concerns raised, as george mentioned, by pilots who fly the aircraft, she felt that he wanted to drive a little more deeply into the issue, study it a little bit more closely, and then he has made these decisions and issued this correction. yes, jim. >> john, once the back of oxygen system is there, does that -- does it go back to normal in? will they stop this limitation on the flying? >> i wouldn't connect these three in that way, jim. i mean, the secretary wants to preserve his decisions based here. and that's why, you know, getting to bob's question, there's not a deadline here on how long this is coming to be in affect, this proximity issue. he is coming to receive regular updates from the air force, and he will make decisions based on what he learned and what they've learned about fixing the problem. this is a problem that needs to be solved, and i think he wants to preserve as much to susan spacious as he can to this gimmick of the root cause of the hypoxia like event hasn't been determined. it is possible, and i am not the technical expert but it is possible that the -- it could be attributed to the oxygen system in the airplane, thus the installation of back of oxygen systems. but there could be other causes, too and the air force is looking aggressively at other factors that might be contributing to the hypoxia-like defense. >> how many people have suffered the seasons of hypoxia? how long has this thing been going on? does this create the last very and coming off provision back in november? >> it's a good question. i think the air force is probably in the best position to answer those specific questions. estimate i do have some -- >> do you have the tools? >> the first report is paths the africa related event was april of 2008. there's been a total of 12 reported between that time and january of 2011. >> that doesn't -- the maintainers of for hypoxia africa like sometimes does it? >> i don't believe it does but i would refer you to the air force on not one. >> wait, wait, wait. joe ghosh called on by george. why don't we stay on the same subject? >> on a different subject, clich questions -- >> to go ahead. >> quickly, but go ahead. that's fine. ladies first. [laughter] >> that's okay. go ahead. thank you. >> the united states is planning to announce the second phase of military aid with regards to the israel's i ron dome. do you know when this would take place? is next week? >> we have nothing to announce on that. >> nothing on libya? >> nothing to announce today. >> if the minister is planning to visit the pentagon this week? >> the minister will visit the secretary on thursday. the secretary is looking forward to that discussion. he always enjoys receiving minister. the pentagon and to discussing the important issues of common concern. >> the reason i'm asking is because the jurors a one post is reporting that mr. murdoch and secretary panetta will sign the second phase of the -- we've seen the press report but we have nothing to announce from the podium on this today. >> will there be any coverage of the visit? >> we will let you know. we are still sorting out the logistics for the visit. >> coordinating. [laughter] >> there's some more questions on the iron dome. >> [inaudible] >> this is for the installation of the backup systems, that's all. >> and will the ones that are already deployed -- will they have pretty? are they the ones that are going to get it first? >> i have a few bullets here to don't mind me reading it because i want to be precise. the implication for the excellent installation of the backup system is obviously going to begin this fiscal year. phase one of the auto dhaka oxygen system, qualification and flight testing will wrap up in late november of this year. the first retrofit will be completed in december of this year. in beginning in january of 2013 the plant retrofit rate is ten aircraft per month. and then i will just -- i think that's where i will leave that for now. the air force will have -- >> what does that mean? [laughter] >> it means they are going to start -- they're starting work on it right now. he wants this accelerated. but it looks like the one actually start getting into the aircraft before the end of the year, before the end of the calendar year. >> [inaudible] -- the backup systems what actually start going into aircraft until november -- late november of this year. >> the testing will drop in november. the retrofit will be in november. retrofit meaning installed. so by the end of this year. >> okay? >> forgive me because i missed the beginning, but can you explain the rationale -- need you did already -- but with these restrictions on landing or not been far enough, not being too far from the landing, but what that insures? i mean if you get hypoxia and blackout, why does it help that you're closer than before to the landing spot if you -- you see amine? what's the rationale behind the decision? >> it's an added safety precaution they saw the onset -- i am not a medical expert, but mike understanding is the onset is fairly gradual coming and this is just an actor added a safety precaution to make sure that they should -- should a pile of anticipate or believe that this is an issue that he will be able to lee and his aircraft in a relatively short order. >> and you didn't -- and i know you didn't say in subtly how long and how far -- [inaudible] >> this is an -- i mean -- we want to allow the maximum flexibility for the pilots as well. so there's not a geographic let here to be it's just a prudent amount of proximity to a landing strip is what we are looking for a bit >> can you give us the time it held for you -- how far the pilot -- how long it would take to land under the new rules? >> i wouldn't do that to get its way to the case by case on where the aircraft is. the house to the commission is flying where it is to get i mean, the idea here is to make sure that there is a prudent amount of safety belts seem to each one of the flights in case the hypoxia should occur but not be so prescriptive that you limit the ability of the pilot to actually do the mission that they are being asked to do. islamic it's not prudent for us. you are not letting us know what you determine prudent is. you don't know if it is an hour away from the landing strip, two hours, 15 minutes? >> that's right. but -- >> and in terms of judging the seriousness of which the pentagon is responding to this. >> we are responding very seriously. >> but you can't help out with more information? >> it's deliberately not prescriptive in that regard so as not to take away the flexibility that pilots need in the air. and we leave it to their good judgment -- again come back to spence's question they are highly trained, highly skilled. they can make those kind of decisions in terms of how long and how far. but we have put -- it's all -- the secretary has made it clear what he expects from the air force that the air force and their chain of command to determine those kind of parameters. >> [inaudible] >> i'm sorry. look, i think mike's had his hand for a while. are we still won the of 22 -- [laughter] >> it was reported for years ago. i'm wondering whether there has been any serious consideration given to -- i mean, presumably, not just -- it was just the oxygen system that wasn't working, you just replace it. but there is some consideration being given to the extraordinary versatility of this aircraft -- [inaudible] -- everything else in which case is this unique to this aircraft or has anyone come across this same thing with the joint strike fighter for example? >> we are not aware of this an issue in the joint strike fighter. i would defer to the air force experts who know aircraft better than we do. but we do believe this is a unique issue for this particular air frame right now. >> again, this is an engineering problem that needs to be resolved and their working really hard to do exactly that. it doesn't take away from the importance of the -- of the platform of the aircraft, or the fact that we still bellevue, we still need it. it is a very powerful arab in the quiver that we want to keep being able to use. and that's why we are working so hard to try to fix this. at its core it's an engineering problem that needs to be solved. >> [inaudible] >> sure. 66 whether there was a link between the failure, if that is the right word, of the oxygen system, and some other aspect of the aircraft -- >> one is inextricably linked to the other. if it is, as i said, if it is just an oxygen system, you can just -- that's easy, but if it's linked to something else to do with the plane's versatility, that would be more serious, i would suppose. >> epoxy of -- hypoxia-like evens, mike? will again, we haven't determined recalls. it could be something connected to the oxygen system. it could be other aspects of the aircraft that could contribute to the hypoxia through code like events whether it's g force -- the altitude, at which the plane flies. you're right, it is an extremely versatile, capable aircraft. so the air force is looking at the full spectrum of possibilities in a very robust manner. and the secretary is a very confident that they are doing that. >> i think it is just too soon to tell, mike, with any degree of specificity what the exact cause is. >> just to follow up on dan's point. the implication is, by the secretary ordering the sections to be taken, that he's not satisfied with the air force leadership's handling of this. has he been satisfied with them, the action so far or not? what prompted him to act their force to handle this? >> welcome the air force has been addressing this in a robust manner and as i said. he has taken on board within recent weeks concerns addressed by pilots themselves. and he is received briefings on this issue. so that's what's driving his concern, and he wants to help the air force accelerating the address and potential problems with the aircraft. that's the long and short of it. >> why did the aircraft -- themselves? >> that's been looking at this, as i've said, very aggressively for some period of time. the plane was grounded -- i don't recall for how long, but for an extended period, and the secretary wants to add his muscle behind their efforts to address these problems. >> i think the bigger point here is that the leadership across the department cares about this issue, cares about safety of the flight. it's that important, and it's that important to the secretary of defense. >> so it seems -- >> let's go with blaring and the -- >> used the words "automatic that oxygen generator." is this going to replace the manually operated back oxygen generator that they have already in these, that the installed -- >> the phrase i think is and here was -- >> [inaudible] the return -- >> freezing think was in here was a "although backup." i'd refer you to the air force on a question like that, larry e. i'm just -- we are not experts on that. >> okay. let's see here. we have some go back now? wright? yes. >> welcome afghanistan and pakistan, please. as far as afghanistan is concerned, the murder of -- arsala rahmani's murder -- you think that -- how can you predict the future peace investors in afghanistan? >> we condemn his murdered yet he was important to efforts in afghanistan to seek lasting peace and stability in the country. as tragic as his murder was, we don't believe that a wealthy real of efforts in afghanistan or the efforts of the government in afghanistan cause all of in usa to flecha and pakistan going on, and the pakistani foreign minister, madam khar has said the roots should be open between the two countries. and my question is that with the conditions they are putting in the future still and the drone tax must be immediately stopped by the u.s. against pakistan and second, some kind of apology, not just what they are saying the u.s. had said in the past. and finally, how about the haqqani network for terrorism and dagestan is a concern. so where are we stambaugh this opening of the roads? >> we have been in discussions with the government of pakistan for some time on the reopening of the ground lines of communication and we are hopeful that in the very near future they will be reopened. they're important supply routes for us. we continue to work closely with the pakistanis to renew a vibrant relationship that gets over some of the obstacles we face together in the past. .. >> we have expressed deep regret and extended condolences to the iraqi people and those injured in the incident as well. we have been clear about expressing regrets about that incident. and the goal now is to press ahead and move forward and reinvigorate the relationship with the pakistani people. >> on yemen, reports of assaults by yemeni troops on al qaeda militants. yemeni officials saying that this was carried out with u.s. support. they say that the attack and assault was direct guidance from u.s. troops in the country. what can you tell us about the type of support that u.s. forces provided? >> we have long-standing counterterrorism cooperation with the government of yemen. they have taken aggressive action inside their own country against militants that would like to support or to plan attacks against the yemenis and to plan attacks against the united states or other countries. i'm not going to get into the specifics of reported operations inside yemen. but we believe that the government of yemen has taken on, in a decisive manner, the need to go after militants that are at located inside their own country. >> a large part of what we're doing is trying to build their capacity to take on these kinds of missions as well. i agree, george. when i i'm not going to get into the details of ct operations. just understand that the mission is to help build their capacity and to deal with the threat inside their own borders. >> can i follow-up? as described in the article and the rules mandating their operations in yemen, does that sound feasible given what restrictions thereunder, what described in -- what we just described? is about feasible and what you just said under the parameters of the current mission? which is to train? >> it is to build their capacity. and again, we are not going to get into the details of the all that. but the secretary was clear last week. we do conduct operations with the yemenis to get after terrorist targets. again, we are not going to go into the details of that. but a large part of that effort is helping them to build their capacity and do it by themselves. >> leary? >> yes, further north in the region, the secretary said last week that there was a planning going on with regards to syria. i know you guys don't want to get into details, but can you give us an idea of the timeline -- has he given anyone a timeline as to when he wants to see a plan on the desk? and can you give us any broad picture of the nature of that planning we met. >> we are an organization that plans constantly come up sometimes with timelines and sometimes without. i would not want to get into specifics with respect to planning on syria. the focus remains, when it comes to syria, the focus remains on -- with the international community applying diplomatic and economic pressure on the asad regime. they continue to perpetrate violence against their own people and that is deplorable. as the secretary said, the goal is to continue that effort. in terms of planning -- something this building does all the time. >> all right, we're doing some go backs here. all right. >> john, if i understand your timeline correctly, the flight test contribute to understanding the source of the oxygen problems. is it fair to conclude from that that the chances are the department will not find out what the real cause is of the oxygen problems before that time? >> i think they are working on this as hard as they can. and i think if they could find into next week, they would be delighted to do that. but what i was talking about was the flight testing for the backup system that is going to get installed. it was about the retrofit of the backup system. not the general problem-solving effort. >> right. >> yes. >> on south korea, regarding the possibility of nuclear -- adding more nuclear weapons to the korean peninsula, does the u.s. have any plans or intention to deploy tactical nuclear weapons to the korean peninsula? >> no. >> next? >> okay, joe and louis and then rosalind and then dan -- and then one more go around the room. >> to follow up on the question on syria, would you consider the jordan -- the military exercises in jordan kind of messages to the regime in the future, for example? >> the message that joint exercises with jordan sense that we have a very strong military relationship with jordan. >> and other countries in the region. >> and other countries. >> this is an exercise that we do on a frequent basis. i believe it is annual. it is a big exercise. but it's not like we don't do these exercises or haven't on them in the past. it is just a routine part of theater security cooperation efforts. as george said, there is a message to be found in there, it is that we have a presence and we will exercise that presence, and we will work closely with our allies and partners to make sure that readiness across the board remains high. >> and the larger point, this is part of our defense strategy. exercises with other countries. we have done this in a robust manner with a range of countries around the world. and as we work through, you know, the next phase of the complexion of the u.s. military, i think this is going to be very important. not just in the middle east, but also in the asia pacific and south america and elsewhere. >> just a follow-up michael's question on the f-22, just to confirm, is there a re-examination of the f. 35 design? whether it is the oxygen system or other aspects of that aircraft to ensure that it did not have the same problem as the f-22 design and so on? the development of the f. 35 was in part shaped by the f-22 design and so on. so is it clear that that is not a concern or is that being looked at? >> it is safe to say that air force leadership as well as manufacture are trying to learn as many lessons as they can from what is going on with the f-22 for future programs and i don't know to any degree with specificity, what has revolved around the f. 35 in particular. even in the defense industry environment, we are all going to work very hard to make sure that the problem gets solved for this aircraft and doesn't get repeated in another manner. >> i wanted to come something back to something you said about pilot reticence. how reluctant have pilots been to fly the f-22, and how have they need that plane to the secretary -- the secretary of the air force, to their commanders. has that had an impact on the kind of training on the kind of missions that they have been able to conduct using this particular aircraft? >> we might need to check with the air force for specifics, rosalind, but as i understand it, concerns have been raised through the chain of command. we take very seriously safety concerns raised by the men who fly these planes. we have to take their assessments into account when we're looking at how an aircraft flies and how the safety of the flying place apart. so when there are expirations of concern, we're going to take them seriously. >> would it be fair to say, but because these concerns came all the way up into the secretary's office, but this is one of the reasons why the secretary is ordering the steps as opposed to simply letting the air force brass handle it? >> well, i don't think it's either or. the air force has been handling it. they have been managing this problem identification process. and they have taken themselves very seriously, the concerns addressed by air force pilots. the secretary also has the same concerns. it is not either or. secretaries concerned, the air force leadership is concerned, and the secretary wanted to issue the directive today, in order to show that he, in a very formal way, is taking action to address the safety concerns raised by pilots and others. >> when it gets to the secretaries level and the secretary feels moved enough to say something that it's not going to -- it's not going to trigger among the general public, there must be seriously something wrong with the f-22 is the secretary has to get involved. >> well, i'm -- all i can say is that the secretary is very concerned about the concerns. to repeat myself, he takes very seriously the concerns raised by pilots. okay? and that is his paramount concern. it is not about public perception. he wants to make sure that these problems are fixed. this is a -- this is a process that he is engaged in and is driven by. the motive of trying to fix this problem. >> safety is a zero-sum game in the military. it only takes one. it only needs to take one safety concern that is deemed at all valid or even just to be investigated for us to want to make the appropriate leadership positions. i mean, there is no margin for error. safety is a zero-sum game. >> has the secretary met with any pilots who have been concerned about this? >> not to my knowledge. >> he said he's been briefed by -- >> he's been briefed on and i'm not aware of any face-to-face meetings? america has spent billions of dollars on these two new fighter aircraft. the f-22 has a problem and the pilots making -- they are nervous to fly it. and it potentially cost one pilot step. the f. 35 can't land on a carrier. the f. 35 variant was on probation for many months. is there a bigger picture problem with the way we buy these high-end weapons systems that make them too reliant on the manufacturer and not rely enough on the people who actually are going to use these weapons systems in combat? can anything be done were we too far gone? >> look, anytime you purchase a new system, whether it is a ship or an airplane or a motorized vehicle, there are always going to be technical issues that have to be ironed out. often times it takes several iterations of a copy of one of those systems before you get all things and all bugs ironed out. in this case, with the f-22, it is a safety of flight issue to the human body of the pilot in the cockpit that we are taking very seriously. i think it would be leap to just use this incident with this aircraft and say we have some larger acquisition problems writ large with how we purchase and buy and set requirements and control costs for aircraft in general. we are taking this case very very seriously. that's why the secretary is involved. and you have to remember, the majority of f-22 pilots are flying every day. as you know, deployment to southwest asia has been no problem. it is flying. as i said to roslyn, it doesn't take but one validated, sincere safety concern to cost leadership -- it should cause the leadership to the highest levels -- to be concerned and register that concern. >> a new topic? >> mutilate maybe a couple new questions and then we will wrap up. >> how much will it cost to fund the ansf through 2025, and how much of that do you expect to get from nato allies committed during this upcoming summit we can? >> i don't have specific figures, but i believe that art isaf partners and we and the government of afghanistan have a very strong interest in sustaining a ansf force that can provide security for the people of afghanistan. and we realize that there is going to need to be helped up on that. the afghans themselves are willing to pony up money to fund the effort. we're going to do all we can to try to fund the efforts you. but this has to be a multilateral funding effort. we think that there should be contributions from other countries. and so we will be looking to ensure that we -- i mean, first and foremost, we want to ansf to be strong and capable and they are making extraordinary progress. secondly, we need to be strong and capable for the long-term. we want to make sure that the size of the ansf is appropriate. and third, honestly, it takes resources. it takes people and also it takes money and equipment. so we will be looking at the long-term funding as well, for the ansf, and that's going to be the trajectory that we have in terms of trying to identify funding. >> one more. i mean, you're welcome to wrap up the conversation. are you calling the questions, bob? [laughter] >> well, that's a shorter then usual question. [laughter] >> did the secretary of defense -- did he extend his you to her as saceur ntu commander? and has a secretary also reached out to nasa and the navy to see what they have done? >> all right, and then we will let bob called a press conference. >> this is the plan right now. and i am just not enough of a technical expert to explain why the timeline is that the way it is. i'm not aware that he is asked for a pool of pilots. but he has, as part of his direction to the air force today, he has requested that they reach out to both the navy and nasa, as they began to continue to troubleshoot the program. >> i grew up in this town. i was raised in northern virginia. my father worked in government. one of the oldest parlor games in washington dc is trying to figure out who's going to be the next in a particular job. i'm simply not going to get involved in that kind of speculation were parlor game. there have been no announcements made on saceur or on other leadership positions in the military. and so you can count me out of your next parlor game, okay? >> it's trivial pursuit, sure you don't want to come? >> trivial pursuit, i confess, i like. that's it. thanks everyone. >> thank you. >> all right. >> you are watching c-span 2 with politics and public affairs weekdays featuring live coverage of the u.s. senate. on weeknights watch key public policy events every weekend the latest nonfiction authors and books on booktv. you can see past programs and get our schedules at our website and you can join in the conversation on social media sites. >> tomorrow morning, "washington journal" takes a look at the government's role and forecasting and researching tornadoes. our guess is piques bots who wrote an article in the christian science monitor entitled inside the funnel. we know more than ever about twisters. he will take your phone calls tomorrow morning at 9:00 a.m. eastern. >> today mitt romney returned to iowa for the first time since the states republican caucuses in january. campaigning in des moines, he called the national debt america's nightmare. this is just over 20 minutes. >> thank you. a warm welcome. thank you for the introduction. governor, good to see you here. we have a wonderful presence in this room and i appreciate the chance to see you again. it's good to be back in iowa. so many friends. here in this room across the state -- behold a very special place in my heart. i appreciate you coming to spend a few moments with me today. i have come here today to talk about an issue that affects the very heart of america. and, of course, iowa is much more than a collection of beautiful farms and small towns and cities bounded by two of america's great rivers. it is also a collection of the values that built america and has sustained us through good times and bad. and you know well what those values are. hard work, taking care of our neighbors, family, common sense. common sense -- kitchen table values, not fancy, but enduring values. these are the values that we no won't lead to spending sprees and piling up debt for your grandchildren. these are not the values with the hope that someone else down the road will solve the problems. as you just heard from the lieutenant governor, america faces a financial crisis. debt and spending that threaten what it means to be american. here in the heartland, you know in your hearts that is wrong. we cannot spend another four years talking about solving the problem when we know that we are making it worse every single day. when the men and women who settled the arbitrary, they didn't look around for someone else to say them or go back to sleep and hope the wind might change directions. they knew that survival was up to them. a prairie fire is sweeping across iowa and the nation. and every day that we fail to act, that fire gets closer to their homes and the children that we love. now, you know also, this is not solely a democrat or republican problem. the issue isn't who deserves the most blame. the issue is who is going to do what it takes to put out the fire. now, the people of iowa and america have watched president obama nearly four years now, much of that time with congress controlled by his own party. rather than putting up that spending fire, he has been feeding it. he has spent more and borrow more. the time has come for a president, a leader who will lead us. i will lead us out of this debt and spending inferno. we will stop borrowing unfathomable sums of money we can even imagine from foreign countries we are never even went to visit. i will work with you to make sure that we put out the spending and borrowing fire. [applause] [applause] >> a lot of people think this is a problem we can solve. and i reject that kind of a cannot do to peter's talk. it is wrong. what has happened here -- it isn't complicated. washington has been spending too much money and our new president made things worse. his policies have taken us backwards. almost a generation ago, bill clinton announced that the era of big government was over. even a former campaign worker like president clinton, was signaling to his own party that democrats should no longer try to govern by proposing a new program for every problem. president obama tucked away the clinton doctrine in his large drawer of discarded ideas come along with transparency and bipartisanship. [laughter] [applause] [applause] it is enough to make you wonder if maybe it was a personal beef with the clintons, but probably it runs much deeper than that. president obama is an old-school liberal, whose first instinct is to see free enterprise is a villain in government as the hero. america cannot president obama to rescue the economy, to taint the deficit and help create jobs. instead, he build up public sector, gave billions of dollars to companies of his friends, and added all most as much debt as all combined. the consequence is that we are now enduring the most tepid recovery in modern history. the consequence is that half the kids who are graduating from college can't find a job to use their skills. half of them. the consequence is that retirees can no longer get by on their savings and social security. the consequence is that the length of time it takes an unemployed worker to find a job is the longest on record. that is why even those who voted for barack obama are disappointed in him. disappointment is the key in which the president's reelection is being placed. americans will not settle for four more years of the same melancholy song. we can and must do better than that. [applause] [applause] president obama started out with a near trillion dollar stimulus package. it was the biggest and most careless one-time expenditure by the federal government in history. and remember this. the stimulus wasn't just wasted. it was borrowed and wasted. we still owe the money. we are still paying interest on it. and it will be that way long after this president is out of office. of course, then came obamacare. even now, nobody knows what will actually cost, and that uncertainty has slowed the economy. employers delay hiring, entrepreneurs put off starting new businesses, because of his massive debt that americans did not want and cannot afford. when you have all of these policies, this president has increased the national debt by $5 trillion. we need to put that in a way that is easier for all of us to comprehend. $5 trillion is not easy to put our minds around. you are households share -- you are households share of government that an unfunded liabilities has reached more than $520,000. her average american household. inc. about what that means. your household will be taxed year after year just to pay the interest on that debt could end to pay the principal payments on those liabilities. every year you were born to be paying for things that have happened in the past could and it will get passed along to your kids. they will struggle with the interest on our debts. president obama is adding to them every single day. that, by the way, is the best case scenario. the interest rate on that debt could go up like a rocket. just like an adjustable mortgage goes up. there is also a good chance that this kind of debt due process to hit a wall, like they have in greece and spain and italy. subprime mortgages. they came close to bringing this economy to its knees. this debt is america's nightmare mortgage. it is adjustable, no money down, and a sign to her children. and politicians have been trying to hide the truth about this nightmare mortgage for years, just like liar loans. this is not just bad economics. it is morally wrong, and we must stop it. [applause] [applause] >> during my years in business and state government, we recognize the economy has three major players. the private sector, free enterprise come in the states and localities, and then the federal government. of the three, the private sector is by far the most efficient and cost effective in providing the people of our nation the products and services they want. that is because scores and scores of businesses and thousands and upon thousands of entrepreneurs compete every day to find a way to deliver a product or service that is better than anyone else's. they are all trying to come up with something better. think about smart phones. blackberry got things going. then apple introduced the iphone. now the android platform is leading the market. in a world of free enterprise, competition brings us better products at lower cost. that's the whole idea. not because they are all smarter, big because there are people competing with ideas, coming up with better ways to come up with better products. the customer, that is us, benefits from all of this. government doesn't begin to compare when it comes to the change and improvements that provide better and less expensive services and products. you can't compare with the private sector. among governments, to states and localities are more responsive than the federal government, but by far the slowest and least responsive sector is the federal government. it has no competition that recognizes. nobody here -- washington dc, the home of efficiency. [applause] just imagine if the federal government would be the whole legal supplier of cell phones. first of all, they would still be under review. all right? you would be listening to hearings in congress on cell phones. when they were finally approved, the contract to make them would go to an obama donor. and of course, they would come out looking like the size of a shoe with a collectible solar panel attached to the side of it. [applause] [applause] and of course, campaign donors would be lining up to see who could get appointed to become the czar. my point is this. and it is an important point. as president obama, an old-school liberals like him, have put our economy into debt, and the private sector gets smaller and government gets bigger, everything we do becomes more expensive, less efficient, less useful. government makes america less competitive. the more government, the more expensive it is. what president obama is doing is not bold. it is old. as president, i want to make the federal government simple, smaller, smarter. [applause] [applause] this is part of the brilliance of the founders. they recognize that individual people, citizens, pursuing their own dreams, would be able to create a stronger, more vibrant life for the american people than the government. that is why what i'm describing is consistent with the constitution. this is why i don't, for one moment,, sure my opponents believe that our spending problems can be solved with more taxes to you don't know washington a bigger share of your paycheck. instead of putting more limits on their earnings and on your options, and on your enterprises, we need to place we are in firm limits on government and on its spending. [applause] [applause] right now the federal government spends about a quarter of the entire economy. i want to bring that down to 20% of the economy within four years. by the end of my first term, we dramatically scale back the intrusiveness and the size of borrowing of the federal government. the president's plan assumes an endless expansion. with rising costs and of course, with the spread of obamacare. i will halt expansion of government, and i will repeal obamacare. [applause] [applause] working together, we can save social security. without making any changes to the system for people nearing retirement. we have two basic options to do that. for future retirees, no change for current or near retirees. one would-be tax increase for high income retirees or high income retirees to be. the other would be to increase the rate of benefit growth for high income retirees to be. i say, the second option. it protects everyone in the system or near it, and also avoid higher taxes the drag on the economy and make it harder to create jobs. i've also proposed a plan for medicare that proves that program and keeps it solvent and slows the rate of growth of cost and health care. both of those reforms are relatively simple compared to the far more difficult choices we are going to face if we do nothing. and of course, medicare and social security are also very easy to demagogue. and i expect the president to continue doing that throughout the campaign. americans are onto that and i am not going to insult voters the voters by pretending that we can just keep putting off entitlement reform. i'm going to continue to speak honestly to the american people, and if elected, i will do what is right for the people of this great country. [applause] [applause] now the president's effort to redundancy and waste -- think about these numbers. in 2011, the government accountability office found 34 areas where agencies, offices or initiatives in the federal government had overlapping objectives and were providing similar services. the gao admitted that redundancy could save over $100 billion. yet a year later, only three of the 34 areas has even been fully addressed, and only one program has been defunded. in 2010, 17 federal government agencies gave $7.7 billion more to the united nations than is required under our agreement with the united nations. another example. there are 94 federal programs in 11 agencies that encourage green buildings. the report found that the results of those initiatives and investments are unknown. we see the same bureaucracy and overhead in our antipoverty programs. last year from the federal government spent more than $600 billion on more than 100 different antipoverty programs. all of them designed to help those who couldn't help themselves. my approach to federal programs and bureaucracy is entirely different. move programs to the state or private sector where they can be run more efficiently and where we can do a better job helping the people who need our help. [applause] [applause] shut down programs that aren't working. cut them off. eliminate them. get rid of them. obamacare would be number one. [applause] [applause] and then, of course, streamline everything else that is left. it is time for the people of america to take back the government of america, and we are going to get that job done. [applause] [applause] entitlement reform, doing away with the redundancy and waste in government, and shipping services and programs to the economic player who can deliver the best, these are the serious steps towards getting our debt and spending under control but i am going to take. above all, we need to shake up the static big government mindset of the past three years and all the limits and regulations that go with them. we need a big turnaround here. and it is going to require a focus, unrelenting long-term agenda for economic growth. instead of leading the world and in how much we borrow, we have to continue to lead the world and how much we create. with all that we have been through in these last few years, the challenges can seem awfully big. and some, i look at america and wonder if we have lost our confidence. the confidence isn't what is missing. all that is lacking now is t missing. all that is lacking now is the right direction and leadership. these have been years of disappointment. and decline. soon we can put all that behind us. we can prosper again. with a powerful recovery we have all been waiting for. the good jobs that so many still need to read and above all, the opportunities we owe to our children and our grandchildren. while this can be more than a hope. it can actually be our future. it can begin this year in the choice you make. so i am asking for your help. your support, and fewer boats on the sixth of november. this is a critical year. this is a decisive year. this is the year where we decide what kind of america we will have. larger and larger government, that is less efficient and more expensive, a nightmare mortgage crushing our future and the future for our children. or instead, returning to the vibrance and power of america as we know it. i am convinced that you're going to see this nation a resurgence in our manufacturing sector, a resurgence in innovation and startups and new businesses creating new jobs. my vision for the future is a bright and prosperous one. we are not weighed down with the problems of the past if we have a leader who understands the potential of the future. with your help, working together, giving iowa in my column in november, we can get america back on track. so you can be confident that your children and theirs will have a brighter future than even what we have enjoyed during our lives. thank you so much, and god bless this great country. [applause] [applause] [music playing] [music playing] [applause] [applause] [music playing] [music playing] [applause] [applause] is a co. [music playing] [music playing] [applause] [applause] is a is a co [music playing] [music playing] >> every week, british british prime minister david cameron goes before parliament to answer questions with the house of commons. you can see the prime minister's questions tomorrow morning at 7:00 a.m. eastern here on c-span 2. you are watching c-span 2 with politics and public affairs weekdays featuring live coverage of the u.s. senate. on weeknights watch key public policy events and every weekend the latest nonfiction authors and books on booktv. you can see programs and get our schedules at her website, and you can join in the conversation on social media sites. senator barbara boxer of california chairs the committee working on legislation dealing with the nation nation's roads, bridges and mass transit. today, she said that she is optimistic that we can come to an agreement on the bill. the news conference this afternoon was about 15 minutes. [inaudible conversations] [inaudible conversations] >> hello, everybody. i'm going to try to complete this before i go down for the next vote. at the opening of the surface transportation bill conference on may 8, i said that i would give regular updates on the progress that we are making. here i am to talk to you about the progress. i'm not going to be addressing specific negotiations between the countries, but i can tell you that we have moved past the organizational stage. we have already had about 20 hours of meeting today to. we are working on the substance of the bill. the staff has been working every day on the issues which are broke down into groups roughly centered around our committee. for example, obviously you would have senator baucus working on on the bridges. he would have senator baucus on highways and bridges. you would have the banking community dealing with transit. and then, the other issues we have broken down. there are other issues such as the restore act, and excel and company and very various items that are handled by myself and senator baucus. that gives you a sense of the way we have broken it down. the vice-chairman and i have been in touch by phone. we were just talking on thursday. i will be breaking members, all of them, this week. the process has been very inclusive. i expected to yield good results. every council has been involved from the freshman to the most senior staff. i have also been doing one-on-one discussions in my office and having coffee, doing meetings with individual members who have specific issues that they want to talk about. so i am optimistic that we can reach an agreement on this bill, and the reason is, again, we are starting from a very bipartisan senate bill, which passed 7422. it has many proposals, including an expanded trivia, which is a leveraging mechanism that we used that will create 1 million new jobs. we also have program consolidation and given the states more flexibility. a lot of reforms, no earmarks. these are all things of the house wants house wants to see help happen as well. the conference was up and running in record time because this bill is so important to our workers and our businesses and our economy. and we have a june 30 deadline. that is critical. that is when the current transportation extension expires. and we all know these extensions are really a death knell for jobs and businesses in our country. there is another reason i am quite optimistic about this, and i will lay it out for you. two days ago, the court of comments wrote in politico, and they wrote a powerful piece that i think speaks to every member. they talk about how doctor cunning cuts to the budget are dangerous and destructive to transit assistance in better needs to significant upgrades and they talk about the disarray of the infrastructure. they say that without successful highway conferences, they said congress would have to cut highway safety programs by 60%, according to analysis by the american association of state highway and transportation officials. so this feeling can be stronger. i strongly suggest that you take a look at this article that was published on the 13th of may. it was very clear. they talk about how giving all the authority back to the states simply won't work. that is the reason i am very optimistic. obviously, we have the best majority of democrats in favor of the senate bill and we have a chairman report of republicans in the senate, and we have to persuade the house republicans. the chamber of commerce has been very supportive in every way you can think of. in addition, hot off the press today, about five minutes or 10 minutes ago, there is a historic letter you can get a copy of. i believe we have copies here for you. it is a communication to the conference on the reauthorization of the judge's transportation program. i will tell you that the link these groups -- it is almost unheard of at some of these groups are on the same letter. looking through these names of these groups, and you hear the message, you will see why i am optimistic that we will get a conference report. on behalf of our respective organizations, we urge you to quickly complete work on math 21 by passing a conference report in order to get a bill to the president for the entire transportation transportation program expires on june 30. this is a historic moment, they write, because the american economy is at risk and the nation is following falling further behind on our infrastructure. the nation's economy is at a critical stage and this bill can be a major factor in sharing those strengths with the american economy. they say a few more things and then they conclude. again, this legislation must be passed before the june 30 deadline to create jobs, protect businesses and keep america on the cutting edge of tremper -- transportation. the american association of state highway and transition officials, the american trucking association, just had a meeting with them in my office there. they are so solid behind this bill. the american society of civil engineers. his ascension of equipment manufacturers. the american automobile association. the associated general contractors of america. the national center gravel association. american capital engineering company, american transportation and road builders association, activision trades department of the laborers international union of america. the u.s. chamber of commerce, the national association of manufacturers. american public transportation association. american highway users, the international bridge tunnel association, the associated equipment distributors. these groups and all their logos are on this. and i will make sure that the members of the conference committee received this letter, along with the copy of the letter. i'm working on a parallel of strategy. one is an inside strategy and one is an outside strategy. the inside strategy is to make sure that everyone involved, everyone participates, everyone is walked through the door and it's the questions answered, and every member can put their idea on the table. the outside strategy is to continue to encourage these incredible and powerful and important organizations to weigh in on the signing of the bill. i'm happy to take whatever questions that you have. >> [inaudible question] >> it will be included. it is in both bills. it will be included, exactly how it all comes out is what we are going to be talking about. i fully support every part of the act. it is hugely important for the gulf states. also, it has a piece that deals with the land and conference untrimmed conservation fund. >> [inaudible question] >> i'm not treating this question any different than the others, my door is open to everybody. but i am having individual meetings with those who have reached out to me and ask for those meetings. i am encouraged because of the two reasons. one, the fact that we do have is very important coalition that is very active and every one of their states and every one of our states. so we all have a lot of them. i have said this numerous times so forgive me if it's boring to you. i always think of this as 12 stadiums -- super bowl stadiums full of people and they are all unemployed construction workers. 1.2 million. that image drives me forward. and i hope it is driving them forward to. every one of us gets thousands and thousands of jobs from this bill. and thousands of businesses will be saved, rescue, kept going, and new businesses will spring up. let me just say, every single member on that committee has my deep respect, they got there because of the leadership chosen, and we are all working together. i have an open door to all of them, including the freshman. >> [inaudible question] >> that is very important. i'm on that particular -- i am heading that working group along with max baucus to get that done. >> [inaudible question] >> something like restore act testerman is a pill. i really do believe that. and i think it will help be an engine. >> are you confident that the keystone will be involved in the final -- >> won't be involved? >> just. >> can give us an update? >> i never said that. we haven't gone down to the areas of disagreement, but we will end we let you know. >> 10 democrats live with that [inaudible question] >> we already had a vote on keystone, and we didn't get 60 votes. we have to figure out a way to get through that hurdle. and i think that we will. we will figure it out. but we haven't gotten down to that. what we are doing now is walking through the built in getting the areas of agreement. and that is what we are doing. >> you said 60 votes. i thought that you only needed -- >> they needed 60, but they didn't get it. >> right, -- [inaudible] >> i am talking about the will of the senate. i'm in a conference representing the senate. what i said from the start is this controversy can get through either house. so we have to work together to find the sweet spot. if somebody doesn't like it, it is filibustered. i have to get 60 votes on the bill. >> but you're not saying that this will be keystone in the final bill? >> i'm not staying saying anything about keystone. we are working on all these issues. we have been in negotiation for a week and it has been a walk-through. now we are getting to it. when we resolve these issues, i will be here explain them to you. i will be here every week, once a week until we get this done. >> have there been any members who have said -- [inaudible] >> if you listen to the opening statements, you know, people said senator, why did you call such a big conference? i had a reason. i wanted to sure what they said. what i felt was most encouraging to me, i didn't hear anybody talk a line in the sentence if i don't get my way on this, i'm out of here. i didn't hear that from anybody. and i am very unhappy about that. i think he gives us a chance to work together. if you can't work together, were not going to be able to do it. we have to meet each other in the center. we cannot stay in our corners. how did we ever get a bill between inhofe in bacchus? a bill that was agreed to by bacchus and bitter? this isn't easy. but you have to listen to each other and work together, and that is what i plan to do in this conference. >> [inaudible question] >> yes. >> [inaudible question] >> i talk to the chairman yesterday and we agreed that we needed to find the funding. i am very optimistic on the funding side. because i think that senator baucus and congressman are working on that. i want the longest bill that we can get that we can pay for because we need time to figure out the long-term solution to how to fund transportation. we will have to come up with that. obviously, we need a grievance to sit back and look at how we're going to do that. especially with cars doing better in fuel economy, which we all support. we know that we have to find another mechanism other than tax. >> [inaudible question] >> everybody is invited for the briefing. yes, i have several meetings set up for this
CSPAN
May 3, 2012 9:00am EDT
elusive to all but the lifelong practitioner of the military art. i'd venture to say most of you in the audience today probably have heard that term, isr. the acronym itself means intelligence, surveillance and reconnaissance. it's been blended in to that acronym, and fundamentally, it means our ability to detect full-motion videos, signals intelligence remotely in ways that, frankly, ten years ago would -- 15 years ago certainly would have been the stuff of a science fiction novel. but we can do it today. .. revenues and reform options rates, revenues and reform options economic facts about taxes, rates, revenues and reform options. >> increased about four fold in number but i would venture to say 25 fold in capability. and so these three in particular, but not uniquely those, there are others capabilities that have come as i said, in former times been kind of attitude or niche capabilities are now increasingly becoming integrated into the traditional conventional way of operating and again provide some pretty significant opportunities for the future. so, in the interest of completing my remarks and then getting to your questions, i would simply say to you that we moved now from writing our new strategy to beginning to challenge ourselves on what it will take to really deliver. and the three things i mentioned here today to you, rebalancing to the pacific, building our partners, and adapting our policies to allow us to build our partners. and then integrating these new capabilities really are the key to that endeavor. so with that, i know that you are eager to ask a few questions. i'm looking forward -- i asked jessica to please be sure to identify those who have the greatest possibility of asking the easy questions. [laughter] there we go. watch out for that guy. go ahead. >> let me ask you a couple of things. introduce yourselves, be brief, and if you would, this is not meant to be a press conference. so please died behind the headlines of this and ask provocative questions that i'm going to start today in the back right there on the aisle. >> stanley roth. want to go back to the beginning of the remarks we talked about the rebalancing in asia, and ask if you could talk a little bit more about to things associated with it. why is how does that relate to the air-sea battle and the ability to execute on this rebalancing? second, what would sequestration due to our ability to carry that out? >> didn't you hear what jessica just had? [laughter] okay, a couple of things about our rebalancing to the pacific. air-sea battle, there's a battle is a multiservice, not join, it is a to service approach to overcoming and access. so not unique to the pacific incidentally. it's unique to come if anything, increasing capabilities. this goes back to the proliferation of technology to a wide audience of potential adversaries who can take our particular advantages and cause us to have to stand off because of anti-access technologies, whether it is jammers, whether its long range rescission munitions. it's a whole suite of technological capabilities. air-sea battle is obviously the air force's and the navy's approach to overcoming anti-access. but it sits nested under something that i actually own, if you will, which is the joint operational access concept. so the chairman in collaboration with combatant commanders has a concept to ensure we can overcome anti-access in all domains, anti-access in the land of domain. what might prevent access in the land domain? ied, for example, which have become an adversaries asymmetric way of denying us access, even when we are far superior to them in terms of numbers and technological ability. so joint operational access is intended to ensure our freedom of movement as a military. air-sea battle is particular multiservice approach to overcoming the specific anti-access strategies in the air and maritime domain. okay, how would sequestration -- by the way, as i said important, it's not just asia pacific. iran has an and access strategy that would my potential have to overcome. what would the effect of sequestration be? let me now talk about sequestration in particular. let me talk about budgetary issues in general. because one of the things that i've tried to articulate, somewhat successfully, somewhat unsuccessfully, you may decide i have moved it to be here in one direction or the other today. even if we didn't have any budget limitation reductions, constraints, whatever adjective you choose, we would really need to change, based on what we've learned over the last 10 years of war, and where we see security, the security environment going in the future. so we have tried to jump out, i say we, the joint chiefs, and the combatant commanders in collaboration, we tried to jump out to 2020. and decide what that threat environment would look like, then to determine what capabilities we would need to address it. and then look backwards at ourselves sitting in 2012 getting ready to submit a budget that goes from 1317, knowing we would have more opportunities over the next four years to build this force for 2020. against a strategy that we can see back in the fall. and 1317 submission was just really the first step in what will be four steps, because we will submit the pops, the program in operation and ran for 1317, 1418, 1519, 1620. so if we don't do it the way i just described on we will be doing this on an annual basis with no framework are really no idea where want to be in 2020, and we'll just back ourselves into 2020. i said i'm not going to talk about sequestration, but i have to mention sequestration in the context of the question. so as i stand here today before, we submitted our budget in february. it's in market right now in the congress of the united states. i don't know what is going to come back looking like. it's a pretty eloquently balanced instrument. that is to say, we tried to balance the reductions and build the best possible force we could against the strategy that we had articulated. it will come back. it will be exactly as we submitted. it never is. and then we will make some adjustments, that to the complexity, that's pretty complex work, that we are not finished yet with fy '13 to budget. sequestration comes to things on the heels of that, and i don't know if your family with the first rule of when walking. i'm not as old as i'm about to sound. i look it but i'm not as old as i'm about to sound like back when walking back in early part of the 20th century, you may recall was sport or carnival so. but the first rule of when walking, walking on the wings of biplanes, the first rule of wingwalking was never let go with both hands at the same time. for pretty obvious reasons. so when people ask me, are you working on sequestration, the answer is no, not yet. i don't have, i have a grip on what i think 13 going to look like, but it's not done yet. and where i can add to this and come up short, i will get thrown off the wing. so in the spirit of my air force brothers, i'm following the first rule of wing walking, and we haven't done anything with it at this point. >> okay, right here. we will take you right here, okay? oh, my. everybody has got to be very brief because there are 100 questions in the room. >> i'm just a mom. i was wondering, we have a lot of people who would say that the pakistani isi was well aware of some of the presence there and how to address working with them as a partner and also how that would lead into the green of the attacks in afghanistan at all the undercurrent of that? >> there's a lot of threats that come together to form that question. the question of our relationship with pakistan in general is, is one of complexity. i mean, deep complexity. also, some pretty significant commitment, military to military. a lot of misunderstanding and a lot of mistrust, fundamentally, that, and this is not a new phenomena. it goes back truthfully decades. for example, officers of my generation have a pretty close relationship with each other because we went to each other schools. we have gotten to know each other over time but there's a generation behind that, for reasons that are pretty well-known, didn't come to our schools. we couldn't engage with them, and so we've got these kind of generational gaps in our relationship that frankly great a lot of mistrust and misunderstanding. we are concerned, have been concerned, have been pretty up front within. i try not to the relationship play out in public but rather work in close as i can privately. but i do remain concerned about the safe havens that runs along the eastern afghan border, the western pakistan border. the green on blue that you describe, and for those of you are not exactly for me with that phraseology, it's the insider threat or the acts of afghan soldiers or policemen turning on the u.s. our coalition partners. it's related but it's not, that's not one that i can see particularly a cause and effect. the green on blue is, if we take 100 instances, even that issue is complex. if we took 100 of them, probably 25 of them would be based on ideological and religious differences, maybe even affiliation with the taliban, maybe even affiliated with the pakistan taliban. i mean, everyone has its own challenges. the other 75 of that 100 would be for other reasons, whether it is tribal or having been insulted or felt like they weren't respected. or internal problems for that particular afghan soldiers family, much like we sometimes see with the pressures of war on our own families. so it's a huge challenge. and i think you know that what we are working on is, we're working on it from several different directions. one is counterintelligence operations inside of those formations ourselves, biometric, education, tactics and techniques and procedures when we're with in and around them that i wouldn't stay public, but that allow us to always be protected. so it's extraordinarily complex. the relationship with pakistan is my most complex relationship, one to which i'm committed to try to find increasingly common interest, certainly along the border between pakistan and afghanistan. >> marvin kalb with brookings. general, is there today a doctrine that governs the use of american military power? i have in mind the doctrine being so central to our operation during the persian gulf war. is there something similar? is there a piece of the doctrine that exist today, and oman, as a functioning party? >> that's a great question actually. let me describe where we are today, maybe even a glimpse of where we might need to be. so if you think about the powell doctrine as guiding us in the early days of the '90s, you know, the roughly from desert storm out through the middle, which, of course, was, you, clear objectives, clear in state, overwhelming force. we found that that model didn't, you know, this is about finding models that fit in each sort of face of the evolution of security challenges. and we found that model didn't fit real well toward the end of the '90s, as you recall, because the challenges that face us, first and foremost they were not existential necessary. so you couldn't galvanize the entire nation behind a particular challenge. secondly, the definition of overwhelming force, for example, a peacekeeping or peace enforcement mission in bosnia was pretty hard to define. and so, you know, but we adopted -- adapted into a peacemaking, after fight against peacekeeping for sometime, we conceded that the military had a role in peacekeeping, and we then began to embrace it. along came 9/11, and as you know famously, we went from sort of the traditional template back to the powell doctrine and then realized what, what confront us in those two theaters was really a counterinsurgency. and so we dusted off counterinsurgency doctrine. it was updated by the army and marine corps, and we embrace the counterinsurgency doctrine. so what you heard the talk about today now i think is kind of a nascent, we are just beginning to adapt from counterinsurgency as kind of our central organizing principle. and if i had to put a tag line on it today, it would be very premature for me to do it, but i'm going to do it, i would say that where we're headed in something that i might describe as a global network approach to warfare, a global network approach. and it gets back to my point about taking these capabilities we haven't had before, integrating them, really integrating them into our conventional capabilities, partnering differently in a, with a very different goal and was very different processes to support it. and allowing ourselves to confront these networked decentralized foes with something other than huge formations of soldiers, sailors, airmen or marines. i'm trying, i am not there yet but i admit it up front this is kind of an inchoate idea, but i do think that what we are looking for in the future is to take a counterinsurgency strategy, which is very static, very manpower intensive, and see what we can do with smaller organizations, but that are networked globally and with partners in order to confront these challenges that might range from terrorism, because it's still out there, to piracy, to transnational organized crime. but again, this is a work in progress. but i have thought about it a lot. >> general, are you can't rule fighting two or three at once? >> then i can pick whichever one i want to answer. why didn't i think of that? >> so many questions. we will start right here. >> my name is mark. i wanted to take on what you just talked about, about partners and networking and how, if you could explain to assure feeling about working with partners in networks that have a problem with rule of law, and institutions. you know, making institutions stronger, and in the traditional relationship between the military and local enforcement and how that all interplays within the partnership strategy. >> yeah. among the lessons of the last 10 years of war, prominent among those lessons is that when we engage in counterinsurgency in particular, not uniquely but in particular, it's not enough just to address the military power. we talk about this whole of government, which by the way overtime actually began to take some shape. in the beginning of let's say 2003, '04, '05, in iraq outside whole of government was kind of a line on a powerpoint slide. but over time, it actually began to deliver. i'll give you one vignette, personal vignette to highlight this. and to those in three, i became the first command of multinational division baghdad, and there was no security force for reasons that we all know. and we will talk about whether that was a good idea or not, but there was no security force. and so we with the security. it became very clear to us, that is to say, those who wear the uniforms, that we had to find a way to get some local security forces on the street. so i began with my subordinate commanders to build almost a paramilitary army, but army like force. i can't even remember the acronym we called it. it became sort of the father of the afghan army, but it was local. we trained them for very minimal amount of time but the idea was to get a face, if you will, that was the phrase, get a face on security that was an iraqi face. concurrently, the department of state began to try to build back up the police forces in baghdad. and just issue the depth of the disconnect, so i was trained this group of, let's call them national guardsmen, what they were. that's what we call them now. that's iran, the iraqi national guard i was trained in to offer in a counterinsurgency environment against an enemy that was very well armed, by the way, even by then. i october of '03 the beginning -- the in the began to manifest themselves. they were good. they were armed and equipped and organized. but the police were being trained and investigations and in traffic tickets, you know, traffic circle but i'm not making that a. and i'm not denigrating it. it was an instinct. we were mere imaging our own instinct and the police were getting clobbered. i mean, their police stations were being run over. they were being killed by the dozens. and so it took us a bit of time to come together, department of state state, department of defense, and decide how we work collaboratively on building up both the army and the police, and we conceded that for a time these police are going to have to have a capability that you would have to have were you sitting here in washington, d.c. over time, this whole of government collaboration began to bear fruit. but to your other point about the complexity of this, you know, issues of rule of law, and i will add corruption, are extraordinarily difficult to overcome because it's very difficult for us to even see it, and let alone having seen it, address it. and as you know, just two years ago we had a stand of anticorruption task force in afghanistan because we realize that the very nation was being placed at risk because of corruption. so i wouldn't suggest to you that we have turned the corner on fully understanding, first of all, how to address that as a whole of government, secondly what the military's role is. but i will say we have come a long way since '03. and i think that as we go forward, we have to keep living away at it. by the way, the end of this story is we are closer as an interagency, as -- we are a network. we are a network. we are all challenge ourselves now is how much better do we need to be to confront the challenges that are coming. we know how to confront the ones we just passed by, that there are new ones ahead. >> let's go to the back. go ahead, amber. >> either, but anthony. my name is john glenn. thank you so much for your thoughts must be my question post directly on the. i would love to talk to you more about the experiences we've had over the past 10 years in working in the interagency but ask you about developing. in particular many military voices for the past bunch of years has said there will be a military solution to it will also have to be one built on the ground with economic development. with at not being a military mission, can you talk more about expenses we again, about how to work across the three d's of diplomacy and element and this in? >> i will try company this is one where you know, i actually, i'm going to digress but i'll circle back on new. when i go speak to groups of young colonels were about to become general officers, and often i'm invited, or apples, i'm often invited to speak of rising groups of senior executive civilians. and i always get the question, what's most important? and the answer might surprise you, it often surprises them, i tell them it's relationships. i say that because to this gentleman's question about how do we make progress on these issues in iraq and afghanistan, we fundamentally make progress as we started to build relationships with each other. and i took a couple of years, by the way. and now, if there was a captain stanton, i think the first person i ever met in the state department, i was probably a lieutenant colonel with 22 years in the service. i'm not making that a. i mean, we had no reason, we had no reason, we have no reason to interact with each other back in those days. really. at least at the lieutenant colonel level. as you got more senior, probably so. today, you can't find a lieutenant that hasn't been partner with somebody from usaid or the department of state or justice, or any number of other agencies of government. the question i actually asked myself now is come out when the world will we maintain that relationship, and the personal connections, as the conflict is the ellen all go back to our cubicles? because that's going to happen. all of my soldiers are going to go back to fort hood and fort bragg and fort lewis and all the state department folks will go back to soggy bottom and never showed any comment as we do something about it i think as a leader develop an issue i think we owe to ourselves and our nation to do something about that your. >> a question over here. >> i didn't answer the second part but i think that's the start of it. >> yes, sir. [inaudible] when you think about visiting partnership our network, are you including international intelligence sharing? because sometimes it's very difficult to match -- ibex pick i am actually speaking specifically about how we share intelligence. no, i in. we do decide that, not perfect but we do it pretty well. actually, we actually do it very well. much better than we did come again, back -- whenever intelligence sharing even in our own government compared what would you today it is just phenomenal. sauce actually speaking specifically about the requirement to take a look at our intel sharing parameters with our partners, technology transfer, foreign military sales and processes. all of those right now, i mean, look, i'm not saying anything i've said to those who own the processes. they are really cold war processes that have not yet adapted themselves to what we really need to be doing today. and in order to deliver the strategy that we all agreed was the right strategy of this country, we've got to get after those processes. >> middle east specials but i think you mentioned i run in passing. and last week your israeli counterpart mentioned that it has been increased preparedness by israel as well with the united states, and other countries. assuming you can confirm that, is this a coordinated effort in case of a confrontation with iran? and that what level is this coordination taking place now? thank you. >> well, i'm not sure, i'm not sure i've ever been accused about talking about iran in passing. but let me confirm for you that united states and israel have, i can't speak to other nations, though i certainly prefer to have him speak for themselves and i know they would rather speak for themselves, that israel and i and the training have been closely collaborate on any number of fronts, especially, especially in areas of intel sharing. so we can come to a common understanding of the threat and of the likely timelines that we might have to confront. and you know, i have probably met with many more than any other of my counterparts, nearly every other month since i've been the chairman. and that will continue because of course we have common interests in the defense of israel. as well as in shoring that, as you know, we said we're determined to prevent iran from becoming a nuclear weapon state. so taken -- so i can assure you we're collaborate with the israeli military on intel sharing, and on our posture. i wouldn't say it rises national i will say it does not rise to the level of joint military planning and but we are closely collaborating. >> good afternoon, general. in the past few weeks, you see north korea at him to launch a rocket. we've seen the new leader give long speech, longer than any speech his father gave. and we've seen a rather large military parade. i was wondering with a sudden rush of information coming out of north korea if you have a better understanding of where this new leadership may go? and if you can share anything with us about what you understand? >> i would describe, i would say that what's been interesting is that he is cleared a different person than his father, and that's, that's not just a function of this age. i think he is a different view of his role in the public. not only is it the speech he gave, but he's much more traveled than his father was. gives traveled i think to 55 or 56 different places around the country. now, i will say a lot of those visits have been to military installations, and you heard in his speech where he said that priorities are not one, too, and three for him or his military. that's distressing, given he is leading a country that is starving to death. but the fact that he is a different leader with a different persona i think is worth exploring, and my role in all this, of course is military preparedness. back to who am i in close contact with, the other chief of defense with whom i spent a great deal of time in person and on the phone is my south korean counterpart, as well as other interested chiefs of defense in the region. so, you know, i think it's probably still premature to make any determination about what later came junk loans will be, although we were all disturbed by the ballistic missile launch which came on the heels of what we thought was a positive engagement. but we maintain our military preparedness, and i know that there are others working on the deficit -- the diplomatic side of it. >> thank you much. i am with voice of america, chinese branch. thanks so much for your remarks. very informational to with that appreciation i'm going to throw softball. my question is regarding the fourth u.s.-china strategic and economic dialogue, which will be held in beijing later this week. and with a framework a bilateral security dialogue between u.s. and china on the military front has been established, so could you please share with us the issues and specific agenda that will be discussed, and next question is, you mentioned your second question can't you just mentioned about building partnership. i would like to get your take on the south china sea issue, especially on the stand off between china and philippines, especially after the partnership of the philippines. thank you so much. >> first of all i think it's probably worth mentioning where i see our future with china. we are balancing ourselves act into the pacific. that's not a containment strategy or china. in fact, i don't know how many of you study history but the greek historian described what he called the thucydides trap, because it goes something like this. it was a thing in fear of a rising sparta that made were in metal. i think one of my jobs, as the chairman of joint chiefs as an adviser to her senior leaders, if to help avoid a thucydides trap. we don't want the fear of an emerging china to make war inevitable. so we are going to avoid the city's traffic i think there's more opportunities than liabilities for us in the pacific. of course, you've heard all of our senior leaders say we embrace a rising china. and i'll take that in terms of partnerships, we have, would've chief of staff of the army, i was able to meet with my counterpart, and those relationships, they are slow and, you know, they are useful. but they are positive. and each service has a different kind of relationship with its particular service. but that's because we are trying to it out. next week or two weeks from now i go to singapore to the shangri-la dialogue i'm hopeful mike chinese counterpart will be different and we'll talk, dinner, very open and transparent about what we're trying to do in the pacific to both build these partners, and what those partnerships are intended to do. and simply state they are in intended to assure stability, and they're also intended to assure, and they are intended to make it clear that we have some interest in navigation, and commerce and access, to which we intend to live. meaning we need to live up to those responsibility that we have as an asia-pacific part of the icy asia-pacific by the way because there is this other country called india over here that is also modestly sized and probably will be somewhat influential in the future. so yeah, i don't exactly what the agenda will be at that particular confident i can tell you what my agenda is. >> i think we have time for two more. >> thank you for the discussion, and i am from the potomac institute for policy studies. i would like just to know your definition for the word of that victory in afghanistan, what are the parameters of this victory and why the war has been protracted? why the most superior power on earth is taking that long to defeat the taliban? and what are the reasons for this and how can we deal with that? >> thanks for asking. i am a student, i am a student of vocabulary, and there are synonyms out there, victory, wind, success, you know? to heat. so let me zero in on the one question you ask about about why is it taking so long. that's a fair question. i would suggest to you it's taking so long because we're trying to do it right the and i really mean that. look, could we start at one end of afghanistan and fundamentally overrun it -- >> just a couple of minutes left in this discussion but you can see all of it at our website, c-span.org. live now to the brookings institution this morning for discussion on taxes by a group of economists will look at the bush era tax cuts which are set to expire at the end of the year, and change to the tax code they say could erase the budget deficit and grow the economy. this is just getting underway. >> brought together a truly distinctive group of policy experts, academics and practitioners. in that context we don't endorse specific ideas. what we do do is organize series discussions around issues that are critical to our economy, and in that respect we have events like we have today with academic and policy experts and practitioners. when we have papers, those papers are subject to rigorous peer review. we believe that the objectives of economic policy should be growth and competitiveness, broad-based expansion of living standards and opportunities, and economic security. we also believe that they can be mutually reinforcing. we support market-based economics, but we believe equally that it is vital to have a strong government reform those functions that markets by their very nature will not perform. the hardship that many americans have been experiencing and continue to experience requires a serious commitment by policymakers, and in support of the commitment, the hamilton project has had a number of discussions and events around short-term policy challenges. but our primary focus continues to be long-term economic policy. we believe that our country is well-positioned in transform global economy, because of our enormous long-term strengths. but we also believe that in order to realize that potential, when you put our fiscal situation on a sound basis. we need of strong public investment in areas critical to our economy, and we need reform in the areas that are so central to our economic success. including health care, immigration, and tax reform. and that takes us to today's program. there is widespread agreement that our tax system is badly flawed and badly in need of reform for the future of our economy. beyond that, however, the agreement breaks down. there are many different views as to the purposes of tax reform, and as the changes necessary to accomplish the purposes. our objective today is to better understand these different views, the effects of the various post-tax reforms and the criteria for evaluating the tax reform. in that respect let me make a few brief comments as framing observations with respect to discussions that follow. number one, major changes in our tax structure and in the level of taxation. for example, increased revenues and increased confidence could promote growth, reduce inequality, contribute substantially to establishing a sound fiscal trajectory. and that was my point before about increased revenues at treating to deficit reduction. with room for public critical investment. number two, having said that there are vigorous debates about what purposes tax reforms should have, what the effects would be of particular changes and with a level of taxation should be. number three, any substantial tax reform will have major winners in major losers. and that creates a very difficult substance with respect to tax reform and very difficult politics. number four, any substantial tax reform will inevitably have multiple effects on our fiscal position, on inequality, and on growth. and, finally, as we all know, the postelection period of 2012 and the first two months of 2013 will post fiscal issues of enormous importance. whether that leads to constructive action or the political system takes those issues down the road remains to be seen, but it's our view tax reform, at least has the potential, for helping catalyze a constructive response. and could play an important role in that response. with that, let me outline our program and briefly introduce our panel members. as you can tell from looking at the program this is a truly remarkable set of individuals. and remarkable may be an overused word but i think it clearly is applicable to the group that we have today. i'm not going to go into the resumes because they are in your materials. we will begin with an overview of the hamilton project well received and eliminating paper, it doesn't economic facts about tax policy. the paper will be presented by adam looney, policy director of the hamilton project, senior fellow of the brookings institution, and one of the nation's leading experts on the economics of tax policy. also, if you look at the extraordinary working group, the front page of the paper that helped guide his paper, it will give you a sense of the truly distinctive the strength of the hamilton project being able to bring together such an extraordinary group. then we will turn to our first roundtable titled the economic case for tax reform, and again, this is a remarkable group for this discussion. the discussants will be martin feldstein, professor of economics at harvard university, president emeritus of the national bureau of economic research, and former chair of the president's council of economic advisers. and lawrence summers, charles w. eliot university professor at harvard university, former president of harvard university, former secretary of the treasury, and former assistant to the president for economic affairs. the moderator will be zanny minton beddoes, economics editor of the economist. i said i wouldn't comment on the resumes and i won't would make a few observations. marty feldstein and larry summers are friends with whom i've had the opportunity to discuss economic issues. in marty's case for many years. and larry's case, for decades. both are excellent listeners, though challenging, to -- they are challenging but they also are excellent listeners, who process what they hear, are open to changing their minds, and then give you reasoned conclusions with a strong grounding. so in addition to their preeminence, they are exceedingly well-suited to the reason discussion of tax reform needs so badly but so seldom gets. i've also had the privilege with being on panels with zanny, and she is not only a decisive moderator, but she frequently knows more about the subject at hand and the discussants. and when i'm on the panel, she surely knows more than the discussants. our second roundtable, key principles for a successful reform effort, the discussants, the honorable john engler, president of the business roundtable, former governor of the state of michigan, jim put herbert, president of national bureau of economic research, professor of economics at mit, john podesta, chairman and counselor of the center for american progress, former chief of staff of the white house, and alice rivlin, senior fellow at brookings institution, former deputy director of omb, former vice chairman of the federal reserve board. the moderator is michael greenstone, director of the hamilton project, senior fellow at the brookings institution, and 3m professor in environmental economics at mit and a former chief economist of the cea. as i said at the beginning this is a remarkable group of people. again, i'm not going to go into their resumes but again up like to make a couple of personal observation. john engler was a committed republican but he also work effectively across the aisle with both parties. that is the spirit that we're going to need both to accomplish tax reform and more generally move forward on the issues of her country. i was in the clinton administration with john podesta, and arguably the chief of staff is the most difficult job of the government, other than of course being the prison. john was announced in chief of staff as well as a friend am india since been a major source of serious policy by county for the center for american progress and also advising those of congress and the administration. i also the opportunity to serve with alice rivlin. she was always an effective and thoughtful colleague, and has long been a major voice, what arguably is our country's most fundamental economic problem, or economic policy challenge i should say, and that his reception sound fiscal conditions. jim poterba has what is thought by many to be the most important job in american economic profession, and he has accomplished the enormous challenge of successfully seceding a giant in the profession, marty feldstein, and succeed in a giant is never an easy task. by the way, by terms of the president, said of the national beer of economic research being the most important job in american profession, marty was an marty if that was true, and he said yes. [laughter] finally, michael greenstone do provides outstanding leadership at the hamilton project, and has also provided frequent tutoring for me and so many members of our project, has done a remarkable job as you can tell from this morning's program. today's program will give all of us the opportunity to listen to and engage with preeminent thought leaders on the economic issues of our country. for developing the intellectual construct and for bringing this program together, i'd like to thank in particular michael greenstone, karen anderson, the deputy director of hamilton project, and adam looney. i'd also like to recognize less saying is, and former assistant secretary for tax policy the department treasure he. and key as always to the work of hamilton project, i think the enormously talented, committed and hard-working staff of the hamilton project, without which nothing that we do what happen. with that, adam, i turned them over to you. thank you very much. [applause] >> thank you for that warm introduction. since the last major tax reform in 1986, tax code has become more concentrated, less efficient, and increase and it is viewed as less there. advocates for tax reform would tell us that by broadening the tax base we can have a simpler system with lower rates. but increasingly that's not all they tell us. some tax reform is an opportunity to reinvigorate economic growth, to unleash economic activity, to create jobs, a way to boost revenues without raising rates, and help solve our deficit problems. we are increasing the way to do all those things at the same time. and so today we wanted to provide the foundation for discussion of what tax reform should accomplish, but also to put guardrails on the conversation, to keep it grounded in the evidence of what tax reform realistically can accomplish. so drunk on the expertise of the many distinguished tax experts, among its advisory council, the hamilton project has put together a dozen economic, about tax reform to facilitate discussion that i hope you've all picked a copy is to pick up a copy on your way in to our starting point is the observation that the economic context today is far more challenging than in earlier tax reform areas but it's not just a statement about today's unemployment rates, clinical situation or the tough fiscal choices we must make by the end of this year. but it's also about the fact that we face at least three important long-term economic issues. that relate closely to tax policy go to rising budget deficit, concerns about growth and competitiveness, and rising inequality. tax reform will be judged in part about how it impacts those three issues. so the first issue -- if i can get to it -- is the daunting outlook for the federal budget. the basic purpose of the tax system is to raise revenues to pay for government services, and in that regard the u.s. system comes up short. for instance, in 2015 the federal government is projected to spend about $12,400 per american, and receive only about $9700 per person in tax revenue. we are projected to collect less reverence and shove economy over the next several years, then we are spending each year of the past four decades. that comparison understates the challenge as an aging population and continued rising health care costs would increase federal spending well above historical levels. this is difficult to envision a scenario in which revenues are not part of the solution. it to death and passionate to examine the role of revenues and the broader fiscal debates come a document provides evidence about how tax revenues in the united states compared to those of other countries examines outburst taxes for options affect revenues and contrast the scale of popular budget options, the magnitude of our future deficit. a second long-term economic issue is the increasing international competition for business activity, the ricin were educated and capable workforce is around the world, and other economic changes have contributed to reduce economic opportunities for many americans and challenges at many businesses. one side of the impact of these trends is stagnation in earnings. for many american workers over the past several decades. concerns about competitors have encouraged greater scrutiny about how rules, regulations and tax -- npr affected activity. it has been touted as an opportunity to boost economic growth, in the document we summarize economic evidence regarding how the current tax system restores or impedes economic activities and which we can expect tax changes to improve our economic prospects. finally, there is the issue of growing income inequality and its relationship to tax code. boom pretax income has risen by more than 250% since 1979 for households in the top 1% of income to should vision. at the same time household in the middle and bottom have experienced much weaker growth. changing the tax system for the past 30 years have tended to exacerbate these inequities. the very people who have received the biggest income gains have also seen the largest tax cuts. it's already quite clear issues where to inequality will be paramount and discussions about the tax system and to inform the debate, we provide evidence on how alternative reform options affect the tax schedule. the document expand in these three areas and provides facts on a dozen indigent aspects of tax policy. just to pique your interest i will highlight just too. facts nine individual it affects employment and workers. a key consideration of tax reform is how much tax rates hold back the u.s. economy, how much lower rate would spur economic gains, and whether those increases in income can help offset losses from lower rates. the figure in your text illustrates how a 10% cut in marginal rates would affect the employment and labor decision of a typical american family drawn on the evidence of 23 published studies. the average estimate across all these studies suggest that his family would increase their pretax earnings by roughly $450 on the basis of about $70,000, that is an increase of the 0.7%. yet the same 10% tax cut is predicted to reduce federal income tax paid by 8.6%. in short, the evidence suggests that that type of tax cut has large effect on revenue mobility of a modest effects on labor supply. fact six examines the limits to what they base broadening tax reform can accomplish in terms of lowering tax rates. we often hear of tax plans highlighting their low top rates. 28%, 20%, 50%, even 9-9-9. [laughter] but those plans are sometimes light on details and how they affect revenues or how they change the tax burdens that fall on different groups. and so we put together a cheat sheet that starts with constraint of maintaining both current tax revenues and the current progressive tax structure, and from that starting point then ask how low tax rates can go under alternative base broadening proposals. under current law, the top row at the table, rise up to level of about 40%. it's only through dramatic attacks reforms eliminate all tax expenditures, for health insurance, retirement savings, owner occupied housing, preferential rates on capital gains and dividends, that one can lower rates even to 27%. that analysis illustrates a broader particularly of the documents which is just how difficult it is to achieve those efficiency enhancing lower rates before revenues fall and tax cut becomes less progressive for popular tax preferences are dramatically scaled back. so i encourage you to look over the dozen facts and we hope it's useful to you in your future conversations. thank you, and i look forward to a very distinguished first panel. [applause] >> [inaudible conversations] just sorting out a few technical issues. now, i ask that you should sit on the left. it seems to be an appropriate place to be. marty, here. i pointed to the wrong seat. welcome to this first panel. and it's something of tax reform has been on the agenda in washington pretty much says, as long as i've been following u.s. economic policy in which i hate to say is now getting on two decades. the complexity of the u.s. tax code is distortion have again and again brought call to reform. up in debates over the past decade a flat tax to the whole code, wholesale reform, nostalgia for the 1986 tax reform, but even as the seven attacks the got more complicated as it added more pages two and more deductions to but it seems to me that the debate today is to get late and a a whole new context. it's in the context of large deficit, a weak economy, widening inequality, and there's an immediate call to action with the expiration of the george bush tax cut at in addition. so not only is taxable back on again, i think back and wait that may result in action that hasn't been the case in the past. so this conversation about what kind of taxi from we should be doing has an important and an urgency that really can't be exaggerated, which is why this discussion is very important. we have two extraordinarily well placed individuals of different perspectives to discuss what sort of tax reform we should be doing, to debate what sort of taxi from we should be doing. you all know them. marty feldstein, professor of economics at harvard university, president emeritus, former chair of the presence council of economic advisers. there some of them also -- former chairman of the national economic council, former student and former boss of marty feldstein. [laughter] so i think marty, let's start with you. i want to start this conversation by actually working out what, what should be the priority for tax afforded a? tax reform has all sorts of good parties. people talk about what is good for growth and completeness, simplifying the code, raising revenue. but many of these are somewhat at odds with each other. and certainly depend on what your priorities are, you would put forward different kinds of reform. so can you just lay out what you think, given what is economy is right now, what should be the priority? rank them. >> let me begin by simply and i come at it from different perspectives, and is probably not quite right. lead and i come at from different political party affiliations, but larry and i have been talking about taxes for 30 years of and so it's not too surprising that there's a lot of agreement. i hope that that comes out as we talk about specific issues. i think about tax reform in terms of the long-term impact. we have a serious cyclical problem now, but i think the tax code that we put in place, i hope that congress puts in place next year, we have to think about for the long-term. what are the things it has to accomplish? you are right that there's conflict among them, but there's always trade-offs, and so it's a question of picking things that do better at these different goals. so what are the goals? i think there are four basic goals. one of them is to raise revenue. and adam looney passionate adam looney's chart showed we need to raise some revenue to how much we need to raise depends on how well congress does at limiting the growth of entitlement. that's not today's agenda. and raising revenue can be done in ways which have good side effects, or ways that have bad side effects. and that brings us back to the discussion about tax expenditures. to the second goal, in addition to raising revenue, is reducing wage. what economists would call inefficiencies or dead weight losses. the tax system hurts productivity in a variety of ways by hurting savings and investment. and by hurting labor supply broadly defined. picture that adam showed us about how it affects ours, just a small part of that. it also affects forms in which people take their conversation. so we are induced by the fact that all kinds of fringe benefits are excluded am taxable income to taking compensation in ways that are less valuable to us, but on a net tax bases are more attracted. and it also affects the kind of spending than americans do, because some kind of spending our tax favorite. a third thing is simplicity. you mentioned that people are just overwhelmed with the complexity of the tax law. it makes compliance more difficult, and it makes people feel that probably everybody else is getting a better deal than they are, that everybody else has figured out some deductions today, some credits today, some ways of changing their behavior that lowers their taxes. .. >> i think people rightly feel that that's unfair. so i think there are a lot of things about the way in which income is defined for taxable purposes which add to the unfairness of the system. but that's my -- >> that's your -- in that order? >> i don't think of it as any order. i'm not going to say we get revenue and it doesn't matter what kind of fairness we get, or we get fairness, and it doesn't matter what it does to revenue. i think you have to think about any given change in terms of what does it do for each of these four things. >> and can i just press you on one of them, do you think that in the light of the fact that pretax inequalities have widened so much, the goal of narrowing them, creating a more progressive tax code, should be a part of tax reform? >> not particularly. i noticed in the background material one of the things that was suggested was combating inequality. and my feeling has been for a long time there are problems in the income distribution area, poverty. and we should be concerned about combating poverty, not about combating inequality. if somebody, if a couple makes $250,000 which is probably not hard to do in the hamilton project or harvard university, that's not something, to me, that needs to be combated. >> larry, do you have the similar set of priorities, or would you have a different set? >> overlapping. um, i would just begin by saying that while it's not our subject today, whether we get this expansion to a sustained, reasonable growth rate that is consistent with a return to full employment is the single most important economic issue facing the united states, and we will not achieve any other objective whether it is sustained fiscal health, the ability to combat poverty, the ability to be strong in the world if we do not achieve that. and, therefore, maintaining the momentum and expanding the momentum of demand has to figure centrally in any economic policy discussion going forward and has to have a very large effect on any thinking about timing and phasing in any set of reforms with respect to the tax system or with respect to entitlements. but that's not our primary subject today. to take your core objectives, zanny, you only can't rank them, but you can give some indications of their importance. and i would agree with marty on the central importance of revenue raising. doug elmendorf, the director of the cbo, gave a very effective presentation at harvard a month or two ago on the nation's long-term fiscal situation in which after going through a lot of stuff he reduced it to the following statement: that in order to get to a stable debt to gdp ratio -- not a balanced budget, but the relatively modest goal of a stable debt to gdp ratio -- after making what he regarded as being at the edge of credible, optimistic assumptions about the capacity to cut defense his conclusion was that you needed either to reduce all entitlement spending by a quarter or raise all revenue collection by a sixth. if you wanted to get to the goal. or you needed some combination of those two things. for a variety of reasons, i think his assumptions are a little optimist you optimistic,i think it's a little worse than that. i don't think it's on this planet that we are in a decade going to reduce entitlement spending by anything like a quarter. and, therefore, relative to the baseline, and therefore, i think it is a near certainty that we are going to need a significant increase in revenues. and it seems to me that any discussion of tax policy needs to start there. and it seems to me that to suggest that from current baselines it is possible to cut taxes substantially and pay for it with as yet unidentified spending cuts is close to inconceivable. and do not represent claims that should be taken seriously in the public discourse. there's room for debate about what the balance is between the quarter on spending and the sixth on tax increasing, but the idea that we can be cutting taxes which implies cutting entitlements by more than a quarter, i think, is, frankly, laughable. so revenues are at the center, number one. second, and here's where marty and i would have a difference in or yenation -- orientation, i think we do need to address the questions of progressivity, and we do need to address the questions of fairness in a central way. there has been a major change in the pretax income distribution that has been generated over the last 25 years. roughly speaking, a generation ago the top 1% got 10% of the income. today the top 1% gets 20% of the income, and if anything, that trend is accelerating. now, it seems to me you can, reasonable people can argue about whether in the face of a change of that kind the tax system should operate to offset it or not offset it. but the view that it should operate to reinforce it, cutting taxes by more at the high end than in the rest of the distribution, seems to me very hard to justify on any way of thinking about it. i share marty's concern for the poor, but that, it seems to me, is not the only valid concern. it seems to me that something about the health of a society has something to do with the ratio of what those who are most fortunate are earning relative to those in the middle class. what is sometimes reduced in the public debate to the ratio of ceo wages to average worker wages. in conservative thought in this area actually surprises me a bit. i would have thought that the right pro-market view to take was that you should let the market grind out whatever income distribution it does, not interfere with the workings of the market. and then the tax system as it collects revenue should be based on ability to pay in a way that raises the burdens on those who are getting most fortunate given what's happening in the income distribution. and so the idea that you should be reducing the taxes on those who are fortunate seems to me to be a quite surprising one. when marty talked about simplicity, he referred to issues of legitimacy. i think the legitimacy of the tax system and the legitimacy of the government on which it depends depends much more on a perception of fairness, depends much more on the idea that those who are in the position to take advantage of the double dutch irish sandwich, or maybe it's the double irish dutch sandwich are paying their fair share of taxes than it does questions of simplicity versus complexity. so i would come next to fairness. i would come, third, to questions of economic efficiency and neutrality. but here i think i would put less emphasis on these questions right now in the united states than i would have over most of the last 25 or 30 years for a couple of reasons. for the next few years, our economy is going to be demand constrained rather than supply constrained. if the economy is demand constrained, increasing the willingness to work -- if not everybody who wants a job can get one -- isn't actually going to increase the total level of employment. moreover, whatever has been true in the past in the current world of 2% interest rates it slightly slains credulity to believe that excessive capital costs represent a major inhibition to investment in the way that i suspect was true to an important degree, um, at various points in the past. so, yes, we should level the playing field, yes, we should reduce various kinds of tax biases that are present, and it would be desirable. but i would put less emphasis on that in our current demand-constrained, low-capital-cost context. finally, simplicity. how can you be against simplicity? but i would just caution that much of what is said about base broadening and simplicity is itself an oversimplification. people always think of base broadening as being about reducing tax expenditures, and then if you don't have the tax expenditure, you have a simpler form, and the whole thing works better. in fact, much of tax -- much of base broadening is about eliminating exclusions from income that incleese complexity. -- increase complexity. so, for example, the vast majority of base-broadening proposals include the repeal of the provision that says that if you sell your owner-occupied house, you don't have to pay capital gains taxes as long as you have a capital gain of less than $500,000. that may be a good provision, or it may be a bad provision. i promise if you repeal it and everyone who sells a house has to go back and look at what they paid for it, calculate all the improvements they put into it and do the calculation, you are significantly increasing the complexity of the tax code. that is not an isolated example. i am in favor of various things that assure that all taxation is, that all income is compensated; club memberships, three-martini lunches and all of that. i think we ought to go after more of that. but we shouldn't kid ourselves that we will have a simpler tax code if we do. l i am sympathetic to ideas that are widely part of tax reform proposals to convert deductions into credits so that they can be claimed at the same rate -- mortgage interest, for example. it's 5% for some -- 15% for some and not 30% for others. but the result will be that more americans will be able to take advantage of the credit, they'll use that instead of the standard deduction, and they will find the calculation of their taxes more complicated. and i could proliferate these examples. it is just wrong to assert that base-broadening and simplification are objectives that go in tandem. more likely, comprehensive base-broadening is a complexifier. my sense of the reality is that almost everyone who has any complexity associated with their tax return either does it themselves with software or does it, or has somebody -- or pays somebody to do it with software. and in that context things that once would have been substantial complicaters, the existence of many different rates, for example, add essentially no complexity. put the information into the software, the software puts the number out. so i don't believe that many of these traditional concepts of simplicity are exactly right. i don't believe that much of what is advocated in the name of simplicity is actually simplification. and i think that we would be better off recognizing simplification for an issue in the way that marty framed it which was as about creating a system that has more perceived fairness, and i think a system that has more perceived fairness, i don't want find it plausible that simply increasing payments to the poor will entirely satisfy the objective of achieving fairness as long as there is a justified perception that those who are most fortunate often are most successful in escaping taxation as well. >> well, you've given us plenty to talk about. we've got the next three hours here. it's not clear you agreed on that much, but i do want to start where you both agreed, revenue raising. i think it stands you both agree that needs to be a top goal, which leads me to a question. why are we, why is the debate then as narrow as it is in the u.s.? for someone with my accent, one could say a crude caricature of the u.s. statement is it basically taxes a narrow base of income. it relies much less on environmental taxes. why aren't we -- if revenue raising is so high on the agenda, shouldn't the tax reform debate be a much more ambitious debate than the one that is actually going on in washington now? marty? >> well, i think by consumption you mean a value-added tax or something like it, and the reason that i don't like the idea of a value-added tax is i think that if you had a value-added tax, it would simply make it so much easier for congress not to deal with controls on spending. i think there's a consensus now that we have to in addition to raising revenue, have to slow the growth of various entitlements, look for other savings in the discretionary part of the budget. if you could pick up four or five or six percent of gdp with a value-added tax, everybody could relax, and i think that would be a mistake. >> larry, what's your view on value-added taxes? >> i've had kind of the same view for about 25 years. which is that we haven't had it because conservatives like marty think it's a money machine for government, and progresses think it's not that progressive, and we'll only get it the day that progressives decide that it's a money machine for government, and they want more government. [laughter] and conservatives like marty decide that it's the least distortionary tax. [laughter] and i don't think that day has quite yet come. and so i don't expect it to figure prominently in the next couple of, in the next debate. look, i think whether we get a value-added tax in the united states or not over the next 10 or 15 years is going to hinge on a question which i don't think anyone really should believe that they completely know the answer to. which is this, what is the structural increase in the health care costs going to be and how successful are we going to be in controlling it. the truth is, it's not going to be possible to control public health care costs vastly more severely than private health care costs because if you do, then the public programs won't work, and it won't work when half the doctors opt out of medicare. so the success in controlling public health care costs is ultimately going to be hostage to the success in if -- in controlling overall health care costs. and given the interplay of technology, given that an increasingly affluent society probably is right to want to devote more resources to health care, given the kinds of relative price changes that take place between health care and other things i don't know how rapidly health care costs will grow over the next 10-15 years. if they continue to grow at the kind of rates that we've had and we continue to treat health care as a, to an important extent, a public obligation, i suspect the pressures for more revenue are going to be such that there's not going to be a viable alternative to consumption and value-added taxation. if efforts to contain health care costs are successful in keeping health care costs at rates only growing at rates only slightly greater than gdp even with an aging society, then i suspect the debate will play out in these terms because there won't be a taste for consumption taxes to pay for broad, new government initiatives. and i am uncertain as to what our success will be in containing health care costs. >> larry's right, no way to be certain about it, but i think the issue comes down to how much will middle and upper-middle income people continually rising, after fluent middle class -- affluent middle class pay for their own health care, and how much of it will be financed by the government. so even if health care costs grow more rapidly than gdp which seems likely, that doesn't mean that government-financed health care costs have to rise that much more rapidly. and the bowles-simpson proposal struck me as a good one of limiting the growth of government-financed health care costs to grow at gdp plus 1%. that means that i will have to pay more out of pocket either for my insurance or for my health care or both. but those are separate issues from what our focus, i think -- >> absolutely. i mean, we could have a long discussion about health care reform, but let's not. but i take your point, larry, that if health care costs carry on growing, then maybe the political environment for a value-added tax changes. but let's go back to the here and now where the debate is to simplify about two issues. one is tax expenditures, and the other is the taxation of capital, both the corporate tax and what should happen to capital gains taxes and taxation at the personal level. there's also the question of the reduction in marginal rates, but -- >> can i just say one more thing on the value-added tax? >> very briefly. >> i don't think it's contentious. it doesn't make any sense to have a value-added tax that raises less than 2 or 3% of gdp. once you're going to set up all the apparatus of it, it just doesn't make any sense unless you're going to have 3% or gdp, 2, 3% of gdp, and so we won't do it until and unless there's a political consensus for needing that much revenue, and there isn't any political consensus for raising that much revenue now. and that's why i'm saying the value-added tax isn't an important part of the -- >> there's not even any consensus about raising any revenue right now. >> right. [laughter] >> let's go to the current debate, and particularly the taxation of capital. and, marty, i want to start with you because there's -- and i'm going to oversimplify, but a traditional view amongst many economists is, you know, low, preferably zero taxation of capital is more efficient, more pro-growth, and yet we have a corporate tax here which is if you saw the article in the, what was it, sunday's new york times? clearly, full of loopholes. and then there's the question of taxation at the personal level. start with the corporate tax. how much of a problem is the u.s. corporate tax, and what needs to be done with it? >> well, the common opposition correctly about the u.s. corporate tax is that at the margin the corporate tax rate is higher than any other country, any other industrial country at 35%. there are a lot of special features that make the effective corporate tax rate lower than that. the thing that strikes me about the corporate tax rate is that we economists don't have a clue about who ultimately pays the corporate tax, how much of that is born by shareholders, how much of it is born by capital more generally. what we understand is that in a world where capital can easily leave the corporate sector to go into other things -- housing, unincorporated businesses, the rest of the world -- then the corporate tax is not borne by shareholders or may not even be borne by capital at all and, ultimately then, is borne by workers rather than by capital owners. so we don't really understand that. but the perception of the corporate tax that it's borne by corporations or by their owners makes it a very hard tax to give up. so every country in the world has a corporate tax. what distinguishes our corporate tax from others is that we tax in a very inefficient way, we tax worldwide income of american corporations but allow those corporations to pay their u.s. tax only if and when they bring those funds back to the u.s. which they don't. so -- [laughter] so the net of it all is that we now see that more and more multi-national u.s. corporations earn profits, do their producing in the rest of the world, um, but don't bring the profits back to the united states because of this extra tax that they would have to pay. and that's why one of the key reforms that i think would be a good one would be for the to join what every other oecd country does, and be that -- ant is to have what's called a territorial tax system which says you can bring back 3 or 4% as long as you've paid your tax wherever you have earned it in the rest of the world. and that's what all other countries are doing, and it would eliminate a lot of the game playing of that story in "the new york times," and that goes on more generally. >> what about you, larry? would that be your priority, the corporate tax? >> i'm a little more enthusiastic about corporate taxation than marty is. i guess i'd make three points. first, yes, the incidence of a corporate tax is complicated, but corporate executives seem in very little doubt about it. nobody ever comes and argues for a major cut in the payroll tax, but there are literally thousands of people employed in this city by corporations with the objective of reducing the tax rate on corporations. which suggests at least some fairly strong view on their part that that burdens corporations and their shareholders. and i think over the reasonable run that is a good approximation, that there are substantial effects of that sort. second, i think it's important to understand that on marginal investments it's not clear that the corporate tax system is very burdensome at all. if i consider advertising which will build my brand, which will pay off over time, if i spend a dollar advertising, i deduct the dollar, and so it only costs me 65 cents, 5% of the cost -- 35% of the cost is shared with the government, 35% of the profits that i earn as a consequence of the advertising are shared with the government. whatever maximizes my profits, if there is no tax, will also maximize my 65% of my profits. same argument works with respect to research and development. what about with respect to putting in place a new factory or a new building? over the last couple of years, with respect to the new factory we've let you write that investment off in the first year. we don't do that going forward. we require you to depreciate i. so there is a sense in which the government is sharing more of your profits than it's sharing of your costs, and that was a really big deal in the old days when the interest rate is high. but in the current world where the rate is 2% -- the interest rate is 2%, the fact that you have to defer your tax, your depreciation tax for five years really doesn't reduce very much its value at all. so it's far from clear that the corporate tax is operating as a major deterrent to investment right now. the vexing issues do involve, as marty said, the questions of international location, offshore income, all of that. and there you have to decide on what your philosophical approach is. we probably are caught in a bad middle right now. and there, basically, are two approaches that the world can take. one is you can, basically, give up, and right now you say that with a lot of trouble and effort -- the irish dutch sandwich and stuff -- you can do investments abroad and not pay much taxes on them, and it's really not worth it to have people go to all that effort, so we ought to just make it official that you don't have to pay any taxes on your foreign income. and that's what the territorial system does, and that's a reasonable argument. the alternative view that we ought to attempt to crack down in serious ways on the allocation of income, we ought to raids questions about -- raise questions about deferral, we ought to cooperate with other countries. and so we don't head towards a world where multi-national income is taxed at a very low rate because of their ability to pit one jurisdiction against another given the distribution of that income. and so it seems to me that right now the u.s. tax system it's like a library, running a library. the single dumbest thing you can do is announce that you're going to have -- is have everybody think that there's going to be an amnesty on overdue books, but then not actually ever have the amnesty. because then you assure that no books are ever going to come back -- [laughter] and they're always not bringing back the book waiting for the amnesty which never comes, so you never get the money. and that's what the u.s. debate is right now. no one in their right mind would bring in money right now with people thinking who knows what's going to happen after the election, there'll be some kind of repatriation. even if you thought you ultimately had to bring the money home, you'd surely be waiting right now. so this is a debate that my hope would be that the clarity comes more in the direction of internationally-collaborative efforts to tax this income rather than the avoidance of this income. but clarity in a different direction would be better than the current place which assures that the money will not be brought back and doesn't tax it and generates all the extra complexity. >> we would have to persuade every other industrial country to give up the territorial system and to crack down on their companies. it seems very unlikely to happen. can i say one other thing about -- larry was very careful to say something about short run versus long run in terms of the corporate executive. yes. the profits of a corporation in 2012 are not going the depend on the corporate tax rate, the pretax profits, and that's probably true in 2013 ask and, therefore -- and, therefore, it's not surprising that if i'm the ceo of a corporation, i would like to see those profits taxed at a lower rate. the real issue is what happens over the longer run, and i think that's where as economists we don't really know where that tax burden is going to fall and, therefore, relying on the corporate tax is, to me, a very strange way of raising revenue since we don't know who's ultimately paying. >> there's an issue -- >> we're going to need to move on, so briefly. >> the recent issue you have to think about which is i don't know what the percentage is, my guess is it's on the order of 40%, of u.s. corporate shares are owned by pension funds or endowments or foreigners in ways where there's no u.s. individual income tax paid. and so it's one thing to say you should eliminate the corporate tax, but the income's going to be taxed anyway by dividends and capital gains. it's another thing to say that when the income is going to be held by the nebraska pension fund or the harvard endowment and there's going to be no taxation ever on that income, you can say, well, there's going to be so much more capital accumulation that, actually, while it feels like the corporation isn't paying taxes, ultimately because there's so much more capital accumulation, profitability is going to be less in the economy, and wages are going to be higher in the economy and so, ultimately, cutting that tax is going to benefit workers. but that's a argument with a lot of steps. >> let's move to because there's clearly a division here, you know? move to a territorial system crackdown, if i could just summarize it, move to the personal taxation of capital. so capital gains and dividends where one argument might be that as in 1986 they were equalized. there's now a pretty big gap. is that -- what direction, marty let's start with you, should the taxation of capital gains and dividends at the personal level go? >> so i think the fundamental question is do you want to tax not just capital gains and dividends, but interest as well. do you want to tax the returns to savings. and we have a kind of mixed system. we say if you put your into an ira, you get a deduction. so we give you a deduction for saving. you put your money in a roth ira, you don't get a deduction, but we don't tax the income from those savings. so for a lot of people we have a system that, in my judgment, correctly doesn't tax the return, the savings or doesn't tax savings itself. and i think there are two advantages to that. one is a kind of pure fairness advantage. um, i might like vanilla ice cream, and larry might like chocolate ice cream, but we would think it very unfair if we had a higher tax rate on vanilla ice cream over chocolate, at least i'd think it's unfair since i'm the guy who likes the vanilla ice cream. but that's similar whether i get my income i want to consume it today or set it aside and consume it in the future. so the tax law currently, unless you're in an ira situation or a 401(k), taxes people who want to consume their income later, who want to save now and consume it later, taxes them at a higher rate than the fella who wants to consume his income now. so i think from a pure neutrality, pure fairness point of view -- >> couldn't you say that the fella that gets all his income in dividends pays a lower tax rate than the fella who gets his income in wage income? >> but i want to start with the wage income to begin with and say, well, if i divide that income, save some of it, consume some of it now, the interest, the dividends, the capital gains that i get by postponing it is just a question of timing of the spending of that income just like the division of my income between vanilla and chocolate, the tax law ought to be neutral with respect to that. >> larry? >> it depends on what examples you choose. and marty's point about the double taxation of savings is a fair one, but it's not the only kind of example you can imagine. imagine, um, zanny, that you start the next facebook. in your garage you've got some idea, you get your friends to loan you some money, make some investment, and you own a third of this thing that's in your garage. at the moment you get the third, there's no income because the thing's not really worth anything. and your thing ends up being worth $100 billion, and you end up being worth $33 billion. many of us would feel that you should pay some taxes. but under the law -- [laughter] you pay no taxes. now, you might think that at some point you will want to diversify, you will want to sell your facebook stock -- your zannybook stock. but, actually, if you're half competently advised, you will find ways to borrow money, you will be able to spend 31 of your $33 billion without ever incurring any tax liability. now, you might ask what will happen if 60 years from now you die and give the money to your children? will -- and then your children, you know, they don't care about zannybook, they sell the stock. will they pay capital gains tax? answer, no, they will not pay capital gains tax. so i think you have an issue around great fortunes. and at a moment when the top 1 or 2% of the people own half the wealth in the country, large fortunes is a kind of significant issue, and you have to factor that into the discussion of capital income taxation. so i do not favor the idea that we should not have capital income taxation for reasons that i think go crucially to fairness. we can't a as a country figure out that a guy who runs a private equity company is earning income by working. we let him call his income capital gains. and so in a country where we can't figure out how to do that, if we escape, if we cut the capital income tax rates to zero, there will just be massive erosion of fairness and progressivity. so i have not bought into that agenda at all. >> so -- >> conversely -- on your side for a second. i think you'll agree with. conversely, i think that you do have to be realistic about these things with capital gains. in our current world where we tax them only when they're realized and where we allow them to entirely escape taxation if they're passed on through estates, the estimate thes of the joint tax -- estimates of the joint tax committee and the estimates of the treasury are that the revenue-maximizing tax rate is about 30%. raising the rate from 30 to 40%, you actually lose revenue. if revenue-maximizing rate is 30%, it sort of follows that raising the rate from 25 to 30%, you're going to impose a very large burden on people per dollar of revenue that you're going to generate for the government. so i think a thoughtful approach to capital gains taxation does realize these elasticities of realization behavior and does lead you to lower capital gains rates than, certainly, the rates we now impose. certainly, the top rates that we now impose. i'm less seized with the case for reductions in dividend taxes because you don't have an issue like that realization issue and because we do need to raise, we do need to find ways of raising revenue. i do think that this whole area of escape, erosion, avoidance, all of that does require more attention, and i am told by those who advise people much wealthier than i that with good advice the capacity to very substantially avoid estate taxation is quite substantial. and reforms that address that issue would, it seems to me, be constructed without requiring higher marginal rates. >> i want to come back to the savings point -- >> very briefly. >> very briefly. i talked about the fairness, but there's also the inefficiency of distorting people's decisions about whether to consume now or consume in the future, and that affect not just capital gains, but dividends and interest. so i think it's worth distinguishing between the person who in the back garage starts a new business and then has a capital gain and people whose capital gains, dividends and interest come from savings out of income. and we do that with iras and 401(k)s and roth iras, and the question is should they be opened up, should they have the kind of ceiling that they have now, or should individuals who want to postpone the taxation of income be a able to put it into an ira or pay the tax and then not be taxed on the dividends, capital gains and interest by putting it in a roth ira, and i think there's a very strong case -- both a fairness case and efficiency case -- for allowing that. then there's the separate issue of whether you should be incented to take time off from your current work to work on the zannybook technology by giving you the chance to get very rich from that innovation, and that's certainly what the current law is designed to do. >> i'm going to open for questions, but before i do that, briefly, one last topic we haven't covered which is tax expenditures. from your initial remarks, larry, it seemed you didn't assign an enormous priority to limiting tax expenditures and the whole debate about should you cap them, should you get rid of them, should you convert them to credit. very briefly, how high a priority should that be, and what tax expenditures ought to be capped or got rid of? >> no, i -- if you heard me that way, i misspoke. >> or i misunderstood. >> i suggested that i did not believe that substantial base broadening done in the likely ways would produce a substantially simpler tax code. i do believe it would produce a substantially better tax code because it would be fairer and would avoid a variety of kinds of distortions that we have, and this is a place where marty and i would be in agreement. marty has put forward a variety of proposals, the obama administration has put forward ones that are somewhat less ambitious than marty's that are directed at limiting the full use of all the existing deductions, and i think the premise of both efforts is a political strategy that you're better off attacking deductions and exclusions as a group than you are trying to choose which ones to go after. and i think that's a good thing to do. i think with respect to most of them but not all of them, there's an oddity that if an affluent individual gives a dollar to charity, they get a 35 cent deduction, and if a middle income individual gives money to charity, they get a 15 cent deduction. so i would, for the most part, favor the deductions into credits. how best to do that, you could debate the technical means, but i would be very much in support of base broadening. >> so when i talked about raising revenue, i said there are good ways and bad ways. raising marginal tax rates is a bad way because whatever distortions there are in the tax law, it exacerbates. and whatever disincentives there are it makes worse as well. so what i would think should be done is to cut back on these tax expenditures, what bowles-simpson correctly called spending through the tax code. and since it is spending, since it is the government saying, well, we would like to encourage you to have a bigger house, a bigger mortgage, a bigger health insurance policy, we don't write you a check for that, we let you exclude it or deduct it. somehow it seems to me republicans and democrats ought to be able to come together around that. democrats saying we want to raise revenue, republicans saying we want to cut spending and marty saying to his republican friends, that is spending. it just happens to go through the tax code rather than the outlay side of the budget. and, therefore, what we ought to do is get the extra revenue that we need by cutting back on that spending. so there shouldn't be a division, political division between those who want to cut spending and those who want to raise revenue if way we get that revenue is by cutting tax expenditures. and the specific way that i think we should do it is to say you can keep all of the current tax expenditures that you have, all of the deductions, the exclusion of health insurance, but you just can't be too greedy about it. you can't take too much of a tax saving from it. so you add up what the tax savings would be from all of the scheduled deductions, one line on a tax return, and be -- and your health insurance exclusion and if that exceeds some percentage of your adjusted gross income, that excess is not allowed. so everybody gets to keep all of the current tax expenditure benefits but only up to a certain amount. and i've done the calculations on that, putting a cap of 2%, and that produces roughly the same percentage extra tax at every broad, adjusted gross income class. so it doesn't change the progressivity of the system, but it produces an enormous amount of revenue. you could start with a less binding cap, you could phase it up over time. i wouldn't put it in next year for the reasons that larry said because of the concerns about cyclical situations in the united states. >> but it also then avoids the fight between which kinds of tax expenditures -- >> that's right. >> let's go to questions. i know we have very little time left, for which apologies, but are there any questions? yes, gentleman there in the fourth row on this side. if you could just wait for the microphone and be brief. >> being a retired individual, i'm very concerned about inflation as far as what it does to my net worth, and in my corner of what i think is unfair about the tax code is the fact that long-term capital gains whether it's houses, stocks or farms are not indexed to inflation, and i'd be curious to hear some comments about that. >> well, i did say that in my opening remarks, that i thought that one aspect of the unfairness of this we don't take into account inflation in the definition of capital gains. that wouldn't be hard to do if we continue to have the capital gains tax. >> i think you're right in principle on capital gains. i've noticed over time that there's rather more enthusiasm for recognizing the inflation component of capital gains than there tends to be for recognizing the inflation component of interest deductions. and, of course, on the same principle that one does it for capital gains, one should do it for interest deductions, and i think there's a reasonable case for doing it. it'd be surprising to me if a country having thought about doing this and decided not to do it at a moment when we had 5, 6, 8% inflation in the '70s and '80s will now gravitate to this issue at a moment when inflation is very, very low. in principle, you're right. >> it's cheaper now. >> it's cheaper to do it. [laughter] next question. gentleman there, five rows back. yeah. >> heard a lot of talk about base broadening, i just wanted to know if you'd both favor taxing harvard and harvard endowment as part of our base-broadening efforts. [laughter] nice tax expenditure there. >> i wouldn't call that a tax expenditure. >> why not? [laughter] >> because we've decided it is not a taxable entity. so it's not a question of the measurement of their taxable income, but whether or not their income should be taxed. so there is a broader question which is how we should treat nonprofits in this country, should we allow contributions to harvard, to museums, to simple tonies and all that -- symphonies and all that. we can do it the way we do it in this country, or we can do what the europeans do and make those government-financed organizations; the universities, the museums, the symphonies and so on. and i think the diversity and the way we do it in this country is preferable. >> gentleman here. [inaudible] >> thanks. question, professor feldstein, a great many republican legislators have signed up to pledges not to increase taxes, and as i understand it those who promote the pledge include filling in loopholes and anything other than a revenue-neutral way. given what you said today, a, does that worry you; b, do you see a way of finessing it? >> some republicans that i've talked to think that even though they signed up for that kind of an agreement if there's a tax reform which is pro-growth, which is tax rate-lowering, then even though it raises revenue they could go along with it. so i hope that once we get past the election and people move from their hardened positions both with respect to entitlements on the democratic side and with respect to tax revenue on the republican side we will see an operational way of dealing with this problem. >> i'm afraid we're out of time, and i think that that's, actually, an appropriate place to end. it seems to me that we've had an extraordinarily interesting discuss, but one that shows that from two different perspectives there is, actually, quite a lot of agreement. there's a lot of difference in emphasis, but a lot of agreement. and, hopefully, the next panel will put some more concrete flesh on that in terms of what we actually get to in the next few months in terms of a concrete tax reform plan. so thank you both very much, indeed. [applause] [inaudible conversations] >> thank you, everyone. we're just going to take a quick ten-minute break. [inaudible conversations] >> so a short break in this discussion on taxes in the nation's economy. we'll continue our live coverage in just a couple of weeks with a look at the keys to a successful economic reform effort. former federal reserve vice chair alice rivlin and former white house chief of staff john podesta will take part in about ten minutes now here at the brookings institution on c-span2. right now, though, remarks from former treasury secretary richard reuben who offered -- richard ruben who offered opening remarks. >> i'm bob rubin, and let me welcome you this morning to our program which, as you know, will be a discussion entitled "economic facts about taxes, rates, revenues and reform options." the housing project began about six years ago, and it brought together a truly distinctive group of policy experts, academics and practitioners. in that context we don't endorse specific ideas, what we do do is we organize serious discussions around issues that are critical to our economy. and in that respect we have events like we have today with academic and policy experts and practitioners. when we have papers, those papers are subject to rigorous peer review. we believe that the objectives of economic policy should be growth and competitiveness, broad-based expansion of living standards and opportunities and economic security. and we also believe that they can be mutually-reinforcing. we support market-based economics, but we believe equally that it is vital to have a strong government to perform those functions that markets by their very nature will not perform. the hardship that many americans have been experiencing and continue to experience requires a serious commitment by policymakers. and in support of that commitment, the hamilton project has had a number of discussions and events around short-term policy challenges. but our primary focus continues to be long-term economic policy. we believe that our country is well positioned in a transforming global economy because of our enormous long-term strengths, but we also believe that in order to realize that potential we need to put our fiscal situation on a sound basis, we need to have strong public investment in areas critical to our economy, and we need reform in the areas that are so central to our economic success including health care, immigration and tax reform. and that takes us to today's program. there is widespread agreement that our tax system is badly flawed and badly in need of reform for the future of our economy. beyond that, however, the agreement breaks down. there are many different views as to the purposes of tax reform and as the changes that are necessary to accomplish these purposes. our objective today is to better understand these different views, the effects of various proposed tax reforms and the criteria for evaluating tax reform. in that respect, let me make a few brief comments as framing observations with respect to discussions to follow. number one, major changes in the our tax structure and in the level of taxation, for example, increased revenues that increase confidence could promote growth, reduce inequality and contribute substantially to establishing a sound fiscal trajectory. and that was my point before about increased revenues contributing to deficit reduction. with room for critical public investment. number two, having said that, there are vigorous debates about what purposes tax reforms should have, what the effects would be of particular changes and what the level of taxation should be. number three, any substantial tax reform will have major winners and major losers, and that creates a very difficult substance with respect to tax reform and very difficult politics. number four, any substantial tax reform will inevitably have multiple effect bees on our fiscal -- effects on our fiscal position, on inequality and on growth. and finally, as we all know the postelection period of 2012 and the first few months of 2013 will pose fiscal issues of enormous importance. whether that leads to constructive action or the political system kicks those issues down the road remains to be seen. but it is our view that tax reform at least has the potential for helping catalyze a constructive response and could play an important role in that response. >> marty, let's -- >> former treasury secretary robert rubin earlier today here at the brookings institution. we'll have more live in just a moment with a look at the keys to a successful economic reform effort. that'll start in just a couple of minutes here on c-span2. while we wait for that to get underway, from earlier a panel on the economics case for tax reform from the same conference. [inaudible conversations] >> start with you. i want to start this conversation by actually working out what should be the priorities for tax reform today? because tax reform has all kinds of good priorities. i mean, people talk about wanting to boost growth, similar mifying the code, improving progressivity, raising revenues. but many of these are somewhat at odds with each other, and certainly depending on what your priorities are, you would put forward different kinds of reforms. so can you just lay out what you think given where the u.s. economy is right now, what should be the priorities? rank them somewhat. >> well, you began by saying larry and i come at it from different perspectives, and that's probably not quite right. larry and i come at it from different political party affiliation, but larry and i have been talking about taxes for 30 years. and so it's not too surprising that there's a lot of agreement. i hope that that comes out as we talk about the specific issues. i think about tax reforms in terms of its long-term impact. we've got a serious cyclical problem now, but i think the tax code that we put in place, i hope that congress puts in place next year, we have to think about for the long term. what are the things it has to accomplish? you're right that there is, in a sense, conflict among them, but there are always trade-offs. and so it's a question of picking things that do better at these different, different goals. what are the goals? i think there are four basic goals. .. in a variety of ways by hurting savings and investment and by hurting labor supply broadly defined, but picture that adam showed us about how it affected hours as part of that it also affects the forum which people take their compensation, so we are induced by the fact that all kinds of fringe benefits are excluded from taxable income to taking compensation in ways that are less valuable to us, but on a net of tax bases are more attractive, and it also affects the kind of spending that americans do because sometimes spending is tax favored. third thing is simplicity. you mentioned that, and people are just overwhelmed at the complexity of the tax law. it makes compliance more difficult, and it makes people feel probably everybody else is getting a better deal than they are, and everybody else has figured out some deductions to take, some critics to take, some way of changing their behavior that lowers their taxes. so we need a simpler tax code. and finally, there's the important issue with fairness. fairness is more than just just a question of productivity or tax rates. it's also the tax base. fortunately inflation is low, but even with today's low inflation, individuals pay capital gains taxes on nominal gains, even when they are real non-gains or losses i think people rightly feels that that is unfair. so i think there are a lot of things about the way income is defined for taxable purposes, which ads to the unfairness of the system. >> in that order? >> i don't think of it as any order. i'm not going to say we get revenue and it doesn't matter what kind of fairness we get to read we get fairness and it doesn't matter what it does to revenue. i think you have to think about any given change in terms of what does it do for each of these four things. >> on the question of fairness, do you think in the life of the fact that pretext income inequality so much the goal of marrying them creates a more progressive tax showed should be taxable? >> not particularly. i noticed in the background material, one of the things that was suggested was combating inequality. my feeling has been for a long time that our problem in the income distribution area is poverty and we should be concerned about, putting them. poverty, not about combating inequality. if a couple makes $250,000, which is probably not hard to do at the hamilton project or harvard university -- that's not something to me that needs to be combat. >> larry, do you have a similar set of priorities or do you have a different set? >> overlapping. i would just begin by saying that while it's not our subject today, whether we get this expansion to a sustained -- >> we go back live now to brookings for a panel discussion on economic reform. former federal reserve fice chair alice rivlin, former michigan governor john engler and former white house chief of staff john podesta have taken part. >> fortunately we have a cast here. i will begin by introducing alice rivlin to my left. alice may well have the best budget resume in washington, d.c.. she's been the director of the omb. she's the founding director of the cbo. she served on the president's commission on fiscal responsibility. she was the co-chair of the domenici rivlin task force on debt reduction, and in addition to all that, she was vice chair of the fed for several years. also to my left, we have john engler who served three terms as the winner of michigan. after that, he was the president of the national association of manufacturers and is currently the president of the business roundtable, and when i was looking at his background last night on the web, i was struck by the following statistics, the companies that belong to this roundtable have sales of not 6 million common of 6 billion but $6 trillion. so john i think speaks authoritatively for this community. to my right, we have john podesta, who sat in almost an impossible number of influential positions in washington, d.c.. in the clinton white house he had several key positions and was ultimately the chief of staff. after that time there, he founded the center for american progress and is now the chair and counselor at the center for american progress. and i should add john has been an incredible friend at the hamilton project. we've collaborated on events and he's spoken had previous events come and part of the reason we are so slight that john is here today is when there is a mass of facts and confusion about the policy and economics and their intersection, john has a unique ability to somehow shed light and clarity on an otherwise very complicated situation. and then we also have to my right my colleague at mit and in addition the president of the national bureau of economic research and a fellow at the american academy of arts and sciences among many other honors. one of the most influential public finance economists in the world. and one could go on and on about jam's accomplishments but unfortunate to have him as a friend who is willing to expense advice, professional and friendship, and even advice on how to manage our three young children. [laughter] >> so i thought i would begin with alice. can you give us a sense of the economics they get the time. how big every reform should we be looking for and in the context of the current economic conditions? >> yes. we should be looking for a very big reform for some of the reasons that were talked about in the earlier panel. every once in awhile, we get an opportunity to solve a problem like reforming our tax system that should have been solved a long time ago, because something else has to be solved. and the something else that has to be solved is the fact that our debt is growing faster than our gdp, because we have this enormous number of retiring baby boomers who need health care and our expenditures of the federal government will go up rapidly over time to meet that obligation and our revenues won't. so here's the opportunity to do you really big tax reform that will give us a better tax system. i think it can be fairer. fairness, as larry stressed, is really important. right now our tax code is riddled with things that not only me get more complicated, but much more important, may -- make it less progressive. things like the home mortgage deduction, which benefits people up the income scale more than people in the middle or the bottom. and we just built an enormously large number of very large houses for very high income people. we really don't need to encourage that. so we could convert back to a credit. what we need to do is look at our whole tax system and see what these deductions and exclusions that have accumulated over the years could either be eliminated or reduced to a more progressive form in a way that will allow us to have a fairer tax system and one that raises more revenue, because we are going to need more revenue. we can't get to a stable debt unless we have more revenue. we also have to reduce the rate of growth of entitlements, but it's not realistic to think that we could accommodate this many older people who have come a need medical care and we have a high standard of medical care, without more revenue. >> thank you. i will turn next to governor engler. governor engler, there's something approaching a consensus i think about corporate tax that the rate is too high end of that there are too many. it appears to provide the broad outlines of the deal. what is the business community looking for in this kind of tax reform? and then i think more broadly, what could this offer to the american economy, to the typical american household? >> sure, it's a great question, and i think the business community, generally speaking, is looking for certainty and predictability to derisk what are so many areas of uncertainty, and i do want to spend a little time on that, because the tax debate and the fiscal debate are very much part of the risk and the uncertainty that confronts somebody deciding about investments today. suggesting there are not risks and uncertainty in the world, but we have moved from a country that could make big decisions and move on to chart a path that doesn't seem to be making very many decisions, and it's not just taxes and spending, its energy policy, where are we headed with health care, was the housing policy, the regulatory policy coming and you sort of get the point. and i think there is, on the sort of discreet question of the corporate tax reform, a recognition that today the u.s. has the highest corporate tax rate in the world. that is a competitive factor among the nations, and one thing that as a former governor i was very much in the nineties involved in the conversations about the competition among the states, and i think people get eight that states will not knock themselves out. to see this from time to time i'm looking to put a plant somewhere in america, and every governor is on the phone. the economic development officials and the governors themselves are on the plane and flying to the headquarters. choose us and here are the reasons why and what it will do for the work force and build the roads and deutsch to the tax guy is. what's not understood among the policy makers is just how big of a risk that competition is among the nations. and virtually everybody at the milken institute that for two days in los angeles this week haven't to walk by the canadian post, the best in canada, and it's the canadian argument as to why canada makes sense, and of course one of the things i mentioned is they are very low corporate tax rates among other things. now, as a michigan governor, i paid a lot of attention to canada in the 90's. in fact, one of the little secrets of success that we enjoyed when we had five years of unemployment rate below the national average is that canada was in the last decade. unemployment in canada was 9.7% average for a decade, just out of control. well they changed a number of things, and some of those are on our agenda. one of those was corporate tax reform. i believe it is possible to do, and we worked hard with the committee of 12 to have a proposal in front of them that would have given the corporate tax reform that would have been -- it wouldn't have leveled the world but you would get us back to an average with today we do leave the will -- although i found out by emi has a higher corporate tax rate in the u.s. but none of the other industrial nations. >> and i want to elaborate on that a little bit. we have a more competitive corporate tax structure would that mean for the average american family? >> the inflation has to be how we get the american growth rate back up? if we are going to languish around 2%, that's not adequate. and you really need to see the kind of robust job creation that will get that unemployment rate below 8%, get the work force participation back of of what is almost at the historical low in the recent years and decades even. you need that gdp to get back to three, 3.5%. i think that the 1% increase in gdp also has a trillion dollar contribution, so revenue. >> would offer more growth. >> it's part of the growth agenda. so i would say by itself is an important contribution. a competitive tax system also fixes your territorial problem. a lot said more about $2 trillion on corporate balance sheets. much of that is offshore. let's bring those dollars home. let's not have a tax code where you go anywhere else in the world without paying additional tax and spend them and the only place you'll spend additional tax if you are on lies and bring them back home. that can't be the right tax policy for america. >> thank you. so, jim come in addition to your many academic accomplishments, you also served on president bush's advisory panel on tax reform in 2005. i wonder if you could talk a little bit we've heard from alice about the challenges we face with the budget and the debt command from governor engler of the corporate tax reform. i wonder if you could, based on your experiences and 2005, if you could get a sense of how we can pull everything together to reduce that coherent tax system that includes income taxes, corporate taxes, i guess in the previous panel there's a discussion about the environmental taxes. [laughter] >> the second time here. i should start by saying acknowledging the folks from treasury and others who were helpful in doing the work on the 2005 panel. you know, the recommendations on that panel didn't exactly create a lot of weight in washington. so i think there's a big -- any information that we give, but i do think that there are two lessons that i would point to in this. one is it is important to think about tax reform as a holistic activities, something that is going to affect many components of the tax system and to avoid the risk of getting a cherry picking. you put together a plan that is great except for this provision which i think has to be sold out because the tax reform is that they are likely to be winners and losers particularly if we are doing tax reform for a revenue raising environment they're likely to be many losers in that situation. but we may be able to get the system which is more efficient better for growth and which makes the burden of the tax system on the tax paying public smaller. but it does put a great deal of pressure on a sweeping everything together so you can say we have done a whole collection of reform here which don't leave you too much worse off or leave you a bit better off but when you start to say we can take components out to that things start to unravel so that is an important lesson. the second thing i would point to is the importance of putting a corporate and individual tax on the table together, and there are two reasons for that. one, as the earlier panel certainly suggested thinking about the taxable income generally is likely to be very important in the coming discussions around the tax reform. you can't really talk with a capital come taxation without having a corporate tax as part of the discussion because you need to think about the project's which began in the corporate sector in many cases and collect all of the taxes that are on them before they ultimately get to their investors and you heard earlier the many different combinations on the corporate investors and the tax treatments that go into that and the tax-exempt investor in the corporation you can have a corporation during a project tax that the household level and a taxable individual investor investing in a corporation and collect taxes of the two levels. so you need to think about what you are doing to the playing field of all of those different ways on the taxing investment projects. not only does the corporate revenue feature in this it's also important for the distributional analysis because when you get to the top 1%, the congressional budget office for example looks of the distribution table a significant component of the tax liability although very households come from the implementation of the corporate tax liability to those households, so if you want to get an accurate measure, you need to feature the corporate tax as well. the other piece of this we did things in '86 that change the relative tax burden on the corporation and a lot of the data that we looked at on the rising inequality is a number that relies on the numbers of a report on tax reform and they change the income on the corporate sector versus the household sector and it shows up in different places in the system. that could have a substantial lead to the measures of inequality. if you look to the number though, there was a discreet but in the concentration of income among taxpayers, individual taxpayers right after the '86 act which could be attributed to a shifting of where those numbers were. >> we have a lot of work to do and that is why we have john podesta batt in the clean up here and i thought i would try to make the task is difficult as possible. and to review what is coming down the pike i guess we are going to hit the debt ceiling before the year ends. the bush tax cuts are set to expire at year end. there's the expiration of the payroll tax cut from stimulus, there's an increase in amc, there's a sequester cut and defense domestic spending. i would say that on the policy side. on the political side i hear that there is no election in november. i looked on in trade to find out according to trade the president will be reelected with a 6% to discuss the 660% chance and the senate will go republican plus we have a lame-duck session. what's going to happen? [laughter] >> i think it takes someone who has been burned so many times through their career to think of this as an opportunity. i do this under the circumstance you can actually find your way to tax reform so i view this as a time this debate can come together now because the economic argument alice agreed with but because of the political destruction that could likely result in a deadlock in the lame-duck session but while people with a strong degree of interest in reforming the code because one of the things you mentioned in particular on january 1st use snap back to a code that actually we look under the clinton administration goes back to more or less the circumstance on which president clinton governed the country and the economy hit exceedingly well. so that becomes a new baseline and the new context in which we look at the ideas that have been already discussed this morning in the panel and have come forward. i will say that most importantly what that produces is a revenue level that is substantially higher than current policy. so current law if nothing happens, the gridlock prevails which is something in washington, a pretty good fact is a level that goes back to about 20, 20% of gdp once the economy has fully recovered. the earlier panel already described the problems with that in the short term what happens in 2013. >> if the economy is still operating with high unemployment but eventually it gets back to 20% of gdp. substantially higher than what we have been operating under, under obama's first three years we have been at 60.8% of gdp which is where we were under the truman administration. so, i think that you begin to have the circumstances in which revenue is at a higher level, and the choices that you need to make their for are the trade-offs between the base broadening and lowering rates operate in the context different than one that we've operated in the last couple of years and under the last decade under the bush tax cut. so that would be with my first thought about this. a couple things. first, i'd think there is general agreement about broadening the base and lower their rates, and i think again, that context gets out the possibility to take a look at that, but if you think about the rate that they currently exist, we have the lowest top rate since world war ii in existence now, and we have the lowest capital gains rate since hoover was president so there's only a certain amount of learning that one can do even as you are broadening the base. the base broadening exercise has to deal with a huge revenue shortfall that facing the u.s.. i could go on but i just want to make one last point. on that topic which is that governor engler raised the issue of canada and looked to hold up -- >> economy which is doing reasonably well these days, but if the united states actually has revenue equivalent to the level of canada at the state, local and federal level, which is below the average in of the oecd we balance the federal budget, so it's good enough for the canadiens i would say probably it's good enough for the americans to try to get to the revenue level the we had in 1999, 2000 where we balance the budget, created a surplus and had a strong economic growth, strong job growth, people were doing well across the income spectrum, and most importantly, people in the middle were doing better, and the question particularly if the wage inequality was just not a topic on the table because the wages were going out and the income was going out. >> thanks. i thought i would oppose the next question to the whole panel. there's a lot of different ways to suggest tax reforms. one theory is the case that we put out the documented the three important factors are the are in fact on growth, and then the impact on revenue of. i want to pose to everyone here supposedly as you do something about that but something changes in the reversed, what is the probability that we are going to end up with a tax system that's worse than the one we currently have? >> it's not a zero. [laughter] we've done that -- >> we have a wonderful set of problems everyone has kind of agree on them we end up with a worse situation. >> well, in two ways. one is that we could do a good tax reform which would be positive of things you mentioned, it would be pro-growth but either way i agree with john. it would be more progressive or at least as progressive but i would hope more progressive, and it would be -- was the other question? yes, of course. it would raise more revenue. we could do that. we have that opportunity and the models exist. and they came out anbar simpson-bowles and domenici-rivlin. we might even do it. but then, unless we put some kind of a safeguard in place the pretense the congress from doing what they usually do and did quite quickly after the 1986 reform, we've risked having things added back in and of course we want to have this worthy program and we don't want to spend money for it we want to put money in the tax code and the tax code rose again, so that is a serious danger and we should do when sure would please governor engler and his friend. put some impediment to the continual change. we need a tax code that we have really fixed and is in place for a while. >> we did end up with a better tax code than would slowly become worse. >> yes. yes i do. >> go ahead, john. >> go ahead. >> i was going to say the risk is probably far from zero because he could meet all these changes and make him temperate refer to years. that's the worst thing. we have 60 provisions of the tax code that expired december 31st last year. 31 more expire this year. we don't have a tax code, that's the real secret. we've got this and automation of all these expiring provisions at various times, nobody can plan on anything. as a, permanency is a fundamental reform coming and then alice alice said he would leave it alone. where we were coming you know, a quarter-century ago was pretty good but if there's a lot of work to undermine and change it and policing it, and i think that a broad affair gets us where we want in the direction we want to go. jim made a point that's really important. we fought with the committee of 12 when they were trying to get an agreement on the $1.4 trillion of budget reduction there was actually an opportunity to do corporate tax reform that may be standing alone but now that we are caught up in the 01 and the 03 expiration, you are really talking at a minimum all love the business which gets at this. that's why we talk of individual rates they come right into that. he made another point, which it's hard to tease out, but a lot of the income inequality is accounted there's so much business and come in at higher top end of the tax code today because of the past partnerships and all that read that there's got to be some kind of equilibrium across the way, and we've got this rather confused tromping the substance, so there's a lot of things you can do the could be problematic. the other thing you could do is there's a piece of what the administration talks about there was sort of good and bad in the framework and the lower corporate tax rate 20% come good direction, good compensation, but some of the treatment internationally. i don't think we want to be the only nation in the world that is requiring immediate recognition of their earnings and subjecting the tax rate. that frankly is a big disincentive and the consequences that happen you could end up with -- you see and some companies it's hard to do, but the headquarters and here. you can see in others we love budweiser and no one ever thought they would be owned by brazilians that if you look at just the tax consequences of that transaction, it made perfect sense when they put that together everyone thought that's going to be. the tax law it's going to be a french company, and i like headquartered companies in the u.s.. i don't want to have a policy that says over the next decade it makes more sense to export somewhere else in the world. >> i think the biggest risk is you walk in a low level of revenue. that all of the discussion about broadening the base and lowering the rates and lowering the rate without a broadening the base. and i think that we will really ended because you build a huge structural deficit in that after 2013 will be even more difficult to get rid of viking -- rid of, i think, and the possibility possibly that he began with a fury that we will figure it out as we go along will set the rate at the front end and then set it out how to get there and that i think would have negative consequences on the middle class because if you begin by dropping the top rate on the first part of the equation and then build that out by essentially building in come back targeted at working people in the middle class, i think that you could end up with a situation that's even worse than we have today. >> that's a danger coming out of the campaign because candidates are all saying, at least the republican candidates say we are going to lower their rates and they aren't telling you how they are going to make up the revenue. >> to .5% rate without any way to pay. >> there will be an expectation. >> a little bit more pessimistic for the other panel. i think if your scenario of the tax reform by december 31st will appear is a good chance we will get something the would make things worse off because i think the true tax reform is really it requires the process, requires the winter of a consensus hearing about the key issues that are going to be embraced in the key principles that are not going to guide the new tax system. that's the way we got the 86 reform, treasury one which came out in 84. that didn't get the full consensus. u.s. treasury ii that did better. we nearly didn't get that to work and then finally the rest senate finance committee and we had bipartisan support in 86 that led to that agreement but there were treetops and compromises about treasury one and treasury to, for example both preserved favorable treatment of capital gains on the grounds that there was inflation and the entrepreneur should issue and we ended up with a single top rate 20% applied to the capitol gains and ordinary income but that took a lot of trading to basically get there. almost anything that cannot quickly i think it could happen quickly but might be improved in some of the kind of limitations on the tax expenditures that are mentioned earlier that are going to have a cap and have the effect of broadening the base in a very simple way. and generating additional revenue all the way. that would be an example of something which probably would move us in a good direction so there will be simple sweeps at the end of the calendar year to move us in the wrong direction and the would also give up the very important option of having a serious debate about where we want to go and could lead to a fundamental reform. >> three briefly the transition will if you are going to go from a lower corporate rate but say business rate and you are going to use tax expenditures and deductions and credits there is a phase out in the transition to requires you could do a lot of short-term debt -- and damaged. >> one of the reasons we wrote this is to even evangelize everyone in this room so when you hear the future 28% tax rate or whatever that thing is, you can turn right to the fact and say what is it in deneen to productivity and revenue. there is a topic that i think is tightly related to all of this, and i think as with many issues come it's not in washington about it but there are different viewpoints about it and another thing to cover the 12th fact i wonder, jim, if i could start you off with this, which is an economic research, there's kind of a growing body of research, which i'm not sure that one agrees with, but really at the high end of income distribution you would not reduce by much. if you had marginal tax rates as high as 60%, and i know not everyone agrees with that, but -- i wonder if you take -- [inaudible] >> more generally i think the question as to what degree do the tax rates affect both work effort and gdp? because it is a central part of the narrative. >> let me take a stab, michael. it's a very hard question. i think the first thing to recognize is that there is only so much that economic research can deliver in answering a question like that. that the essence of studying the history of tax rates is relatively few changes and that we unlike the national scientists can't hold constant all the other things were going on in the world. when we keep tax rates moreover it's like the experiment in the lab and the different petrie dishes. the tax rates themselves have a response to receive circumstances and economy. the classics and was you to look at whether we need to invest in the tax credit available there was more or less investment because any time it is turned on precisely if it is low you discover the correlation doesn't quite do what he might otherwise think. that is the first problem so we don't have that much evidence to look at to be doing the comparisons in the top rate is a remarkably low power away. second, at the top end of the distribution now you are doing something like hours of work and it's probably not what we are after. if you thought about the top executives are the entrepreneurs or others that are in the part of the distribution aside from lawyers where we have careful billing records on how many hours they work it's hard to pin down something like what is labor supply for those groups. what's much harder to think about is what we, an engineer at a company like h-p could decide they are going to leave the security and do something with three other friends from college in the gracia and see it that pays off. so we can describe the ingredients of the process are and we can talk about how tax rates on different parts of that may create incentives to do one thing or another but to then say can you plan to assemble data you can look up in a book and relate to the tax rate we don't have anything that is as easy as that. so there are two things i would take away. one, and absolutely sure incentives to matter even at top of the distribution with the folks who are trying to decide whether to lead an easier life or take more risks be more competitive and sensitive to what the tax returns are but i'm not exactly sure what that elasticity is. second, we do have evidence that taxable income response to the marginal tax rates are the when you lower the rates the capitol gains in the earlier penalty lewd to is the best example of this regular rates using to generate more realization of necessarily more revenue but more realization. even for other parts of the taxable income that seems to be true, deductions seem to be sensitive to rates, even income generation seems to be more sensitive. what's really hardest to get to the bottom of your question which is how does that happen to the undermining economic activity, which ultimately leads back to the growth of that we care about. i think it's dangerous to dismiss the notion of behavioral response to taxes completely. at the same time, i think the existing body of evidence doesn't leave us in a place that we can point systematically that it's an enormous. >> it won't be shocking to hear me say this but i think that we had a expert met here with us. the higher marginal rates, higher capital gains rates from 1992 to 2000 and then from 2,000 to the recession will do we get? job growth, twice the gdp growth, twice the business investment growth medium wage is ten, medium wage income growing up versus down i do think that now are the people who keep arguing for cutting particularly capital rates and cutting taxes overall to show why that won't result in will result in the first decade. >> i agree with all that that >> i agree with all that that jim said but i think it should make as weary of political claims that, for example this would kill a lot of jobs and the public would say is that true because these assertions are being made all the time and people who make them sound as if they really knew that, but they don't. [laughter] >> what the approach this differently because i'm not sure that's the question i worry very much about. i look at today's economy of 3 million jobs that aren't filled because people don't have the skills to fill them. that worries me. if a child was born in the district of columbia where we are today, i think under current spending let's say 25, $30,000 per year spending we are prepared us taxpayers three ander $25,000 to help that child be a productive person by the time they are a high school graduates what's happening with a $325,000 we are getting a job offer it of unexpectedly high we are getting a rate that's unacceptably low, so we've got a lot of other factors i think that come and and whether or not somebody works one year longer or not or workable but harbert for or wants to attend those problems versus the one i'm talking lieber interest rates so low because there are enough jobs and we have to pay on the unemployment rate we have to say where is the growth going that is where the focus ought to be triet on there are a lot of these fiscal and tax questions the are important, but i also think the question of uncertainty and a lot of other areas there is a big, broader political set of questions about let's send the citizens through entitlement reform the clear message on what the rules are going to be and when you will be able to retire the security and when your going to be obligated to do in terms of your health care after we do the medicare reform or what are we going to do for people that can't pay for care and are going to rely on medicaid. all of those of our economic signals that are going to impact people's decisions about how much work and how hard i work, how prepared i'm going to be or understand i need to be when you have military leadership saying more than the majority of young people aren't eligible to be conducted in the military service. we have a national challenge that all of that comes in and factors back in. i don't want to make this so overwhelming, but the tax rules are how we play the game that we have a bunch of other rules that impact how we play the game. they are also just as unclear and just as uncertain, and so i don't get worried about the question being posed about where those incentives lie. i think we get to the point that is all we have to worry about than we have something to say about it. >> let me pick up on the trend that you mentioned there. there is no question the recession come the great recession moved in everyone's living room several years ago, and i think collectively still in the nation's living room one way or another. we also, having all of these talks events happening in the year, how should we be trying to balance the weakness in the economy with this kind of a looming tax threat, and fact that it's managed several scenarios? >> my view is in the previous panel you have to think about this in terms of how you face whiteaker changes you are trying to make. and i think that there's fear that you have that snapback plus i think you mentioned you have the moving target of the sequester the was built into the provisions forecast last summer when the debt limit was last raised. so that is another $1.2 trillion out of the federal spending would come over the decade, significant amounts out of defense whether the political system would tower that or not i'm uncertain about, but that way there is a contraction built into the current law, and i think that that again is an argument why the spring of 2013 is actually an important moment, and optimistic moment the you can find a thing because neither party really wants that outcome and you could find me -- may be the common ground and don't have to include transition and a phase in to otherwise. >> i think, michael, we are in a somewhat fortunate position for the u.s. that the troubles in the rest of the global economy give us a little bit of breathing room in addressing some of these longer-term fiscal challenges. the capitol markets to take a long view, and we could in fact make substantial progress in restoring the sustainable fiscal trajectory without doing things that have to immediately burden of the level of siskel support for the economy. so i think that if in 2013 we could put on the table in plan that did bring us a genuine approach towards stabilization to face things in, governor engler's duals can be very important promise of figuring out what we are going to do and the next planning the capitol tax where you are today to where you are headed that is a project can take a couple of years but there's a value for giving the participants a head up on where you are going and because the u.s. is still able to borrow at relatively low interest rates because of concerns elsewhere in the world, we have the opportunity to weaken try to take those things on. that window may at some point close and we may not always have the discretion of taking our time to think about these for a while before we have to respond. we have seen some of our european counterparts have to do things very quickly when the capitol markets don't give them enough breathing room. >> i think we need to do two things at once, go beyond the slow phase in. clearly, we don't want a big increase in taxes right now, any increase in tax rates right now in the weak economy coming and we don't want to cut in expenditures, especially mindless ones as the sequester would be. indeed, i would argue that we need to invest more in the short run, fix some of the problems governor engler was worrying about which are not only the skill gap with the infrastructure isn't very modern. but we need to do that at the same time that we face in a predictable way the stabilization of the debt on both sides of the spending side and the tax side and here's the opportunity to do that right. >> alice makes an important and and all three of those in response to this question but if you set a certain policy direction and you are phasing in overtime, you still set the direction, and that's really important. that is a big thing and what we've done is created such uncertainty on the payroll taxes the medicare funding is coming out and i think that's in january as well depending on what happens in the supreme court decision itself a niche as a country have our political leadership willing to lead on the position and say this is the direction we are going to go and one of the things that i observed around the country is parties and some you've got governor christie in new jersey and he's got a republican governor in missouri democrats in new jersey but alexis all over the country they are working through things because under a lot of the constitution they have no choice. they've got to balance the budget and present the budget. here we have a sort of perpetual non-budget, and we need to start making some longer-term decisions come in and reforming some of our problems we do a little bit now this is what we are going to do under a long period of time it's amazing how these numbers respond. the social security agreement which was bipartisan when it was done away back when has actually been quite durable. it's lasted a long time and social security in terms of the easiest things to deal with it because we don't fix it like we don't fix the immigration system. all of this comes together and i think what the country is ronald up about is can't anybody here play this game anymore, can't you do something, and we are seeing today is you have a range in some areas i think that we saw in the previous panel they are not all that far apart. pick a direction and go that way. if we got it wrong, we can change it but what we can't cope with is no direction, no decisions, uncertainty. >> one thing about the social security reform where the reform might ago, one of the ways which that reform was achieved is the democrats coming into that wanted to make sure that at least 50% of the closing came in the form of tax increases and the republicans wanted to make sure of least 50% was a form of the benefit cuts and one of the features of the 83 reform was to include social security payments in the federal income tax to a greater degree than we have heretofore in the keys and the democrats rolled out to count that as a tax increase and the republicans rolled to count that as a benefit cut and therefore when you put the two sides together they were able to declare victory and go home and we got the reform, so when you're the earlier panel dhaka of particularly how we might think about tax expenditures in the context of tax reform that certainly sounds to me like we have used once before in this and maybe there's something to be done. >> but it requires my kids and republicans negotiating with each other, and that's what's not happening right now. >> we could reach agreement in a lot of unelected panels. alice and pete domenici did that once. >> yes, very easy but we were not running for public office. >> and you couldn't just put it in effect. so there's a lot of demand for the questions on the floor, just going to impose a 92nd rule for the whole panel with one more question. there's a lot of people that say if we are in a moment we need more revenue, we could raise income taxes one way or another and alternatively we could broaden the scope of things that could be taxed. consumption tax, want to raise one of the different taxes which would be an environmental tax principle, the carbon tax has the benefit of reducing something the we don't like very much. why is that not a part of the discussion? >> it should be. i'm for carbon tax. if it gives you revenue and raises the size of the fossil fuel overtime, which we need to do. but it is such a polarizing issue, worse than the things that we are talking about on this panel that i don't think we should put that up front. i think there is a bigger chance of getting the kind of income tax reform that we have been talking about and we better go for it. >> i think it runs a competitive risk in the trading system in europe is largely failed, and i think that a new tax on production or the carbon tax at the time that we seem to be developing because of the proliferation of shale gas now with dow chemical's construction down the chemistry plants coming back exports now rising used to be a contributor we ought to be taking advantage of the energy advantages as a nation to really help move the manufacturing on shore. highly productive as a result of the recession and why we put a carbon tax up there as a way of reducing the competitive? i don't think business takes the view to pay taxes for we don't pay, we collect them as individuals aren't going to pay taxes but we have to run the government. that's the rule. >> i'm not optimistic even though i would support it i'm not optimistic we would get one. given what governor engler just said, there are other ways of dealing with energy taxes that could have a positive effect. for example, getting rid of the fossil fuel tax preference provisions in the tax code faugh and the other way to think about this is the resources to the domestic resources by taxing oil which would have the effect on moving to the transportation sector, and that's what the defense to have an impact on our balance, but half of our trade deficit still comes from importing oil. so i think that there are different mechanisms by which you could impose energy taxes that would have positive effect on the u.s. domestic growth. >> two things. michael, one, that discussion really needs to be part of a broad energy policy that goes beyond just the tax system from and i think that what one needs to cue that up but there is a bandwidth issue and that's the second point in terms of how much we can take on at one time for berkhout mcwherter quote with we have the individual income taxes as the fiscal reform challenge and we might as well just devote our attention to that in the near term while we've got this coming up at the end of this year to provide the focus of doing that. and then come back at a later date, maybe not too far down the road to think about the broader policy issues. >> as someone who knows and has been a lot on the issues with an optimistic view of a rational policy you have the floor for a couple questions. i think there's someone coming over to the microphone. >> having both sides come to the mill is crucial. what we see is the asymmetry here. a high proportion of of the republican side of the ogle has signed an agreement with grover norquist not to raise any taxes. when you take two-thirds or even two quarters i think the latest count is coming out of the bargaining region, how do you get to a center point? >> well, you know, i have years ago i have some credentials on that party. be an agnostic around the table. effective let me just say this caruthers also asymmetry in the work that's being done by the house's and it seems to me is if you're going to have in the traditional legislative debate format you do what they are doing on transportation. the senate would pass its version of the house would pass its version and then you have the whole mechanism called the conference committee to work out all the differences but if only one house is passing the legislation, the other house is not, hard to go to conference. and the answer i get from some as well, it's really hard. [laughter] >> i think that marty feldstein said it well today he recognized that we are spending through the tax code then we have corporal's coming together here. >> i would say that no one has a lower expectation of the congressional republicans will do in this room than me. but coming back to the fact of an january 1st, 2013, we are going to have a seismic event in the tax code that's going to restore the clinton era tax code. that is a circumstance if obama is reelected, in which i think that he is negotiating leverage on how to force the republicans to the table and to the center. >> yes. >> the 1986 tax code that i was part of under president ronald reagan, and what would be the implication and with the republicans support it? >> good question. >> i think if you gave me the choice of that where we are today we have had a number of things that were holistic in the way about tax structure putting as the governor has said, the tax system has to be responsive to the econoen
CSPAN
May 31, 2012 9:00am EDT
different states of health, and it is much better to avoid a one size fits all policy. those have actually harmed the housing market recovery so far. >> climate change. can we expect to see anything from either candidate on that? >> i don't see that as either a top priority in an era when we need economic growth or something that's politically going to get across the line. so if you rank the policies you want to push, it can't be at the top. >> well, i actually, i think the president is reelected, i think this is going to be a kind of sleeper issue. not speaking for him or the white house, but the fact is epa is on a regulatory schedule, and next year, um, the regulations require significant restrictions on greenhouse gas emissions. and i think that will create a new debate of what's the alternative to epa regulation. perhaps we'll get a, finally get a good discussion of a carbon-based tax. .. >> guest: a lot of them seeing their jobs permanent menly leaving america. the cbo at the end of last year noted half a percentage point of employment above the national rate is due to the skills gap. it is clear the skills force needs an up grade. which candidate offers the best vision for this kind of things? >> i would have answered your question, would have been life-time learning job retraining. it is clear that this recession has harmed the careers of young workers dramatically. the wage losses in this recession exceed the cumulative losses in previous recessions post-war. large hit to young workers and there is not anywhere in the debate a strategy getting them back with the skills they need to succeed. the research evidence is some careers are harmed and may never return to the labor force. it is a series issue. >> i agree it is a very serious issue. as senator the president supported a initiative that would provide grants to community colleges to keep their computer labs open and staffed in the evenings and on weekends for anyone, any american adult to walk in and get free instruction in i.t. skills, which i think is a very good place to begin. he hasn't pushed that as president. i would love to see that. i think this is a increasingly important issue and i think whoever is president will see a real discussion of it in 2013 and 14. >> let me add quickly, i think it is important to talk about deficit reduction. it is important to talk about economic growth. not that you wan grow your way out of structural problems. you can't have just cuts, raise taxes and cuts things. we have to talk about growth agenda. >> this is part of the targeted investments to help people grow. i think we have time for one more. so over here. >> you said to stand up, so i will stand up. >> thank you. >> i'm charlie ericson with hispanic link news service here in washington, d.c. and the presidential race includes an incumbent who is black and possibly a presidential race, might have a vice president who is hispanic. it includes a comment by the cover story on the "time" magazine, the hispanics will elect the next president of the united states. and certainly a key issue deals with the war on women as it is described. we have on the panels 12, 12 people, all of whom are white and male. can we conclude that "national journal" does not value the views and expertise -- these guys -- >> listen, the last panel i did was all woman. so while i appreciate, while i appreciate the question, i certainly disagree with your characterization. but i think you bring up an important question you're not asking, how will either of these candidates -- >> i didn't get a chance -- >> no. i think you asked a question and i'm answering it for you. which is the "national journal" certainly values these woman and i would be curious from the panel how they think the presidential candidates would govern on domestic social issues that seem to have been so important in the discussion of a quote, war on women over the last few months. >> i have -- >> sir, thank you. >> i'm going to say, i don't know how many of the audience was at your last panel. that we actually had some females on it, is it, why didn't the national urn journal give us a more diverse panel that could talk on issues significant knowledge who are other than 12 white males? >> sir, we appreciate your question, thank you very much. >> thank you very much. >> gentlemen, can we answer the question of how the candidates would govern on social issues? particularly the issues of say, abortion and contraception that have dominated sort of headlines last few months? >> certainly i think what you see from governor romney is a real emphasis on things we actually share in terms of aspirations for economic success. women have been harmed in a big way in this recession and tremendous respect for traditional freedoms, religious freedoms, i think there is overstep by the president and i think he would avoid that. >> well, i think the president would continue to govern, based on the principle that we respect relynn just organizations but we also respect the rights of women to have access to contraception in their insurance policies and that employers do not have the right to tell women that they can not get that through their insurance policies, unless they are a church and, you know, i think it is a, i think it is a very clear distinction between the governor and the president, and one that i, i suspect both sides seem quite comfortable with. >> let me say very briefly on the subject, one of the things about the unsustainability of the current situation in the dynamic of the budget that programs that get squeezed are the domestic discretionary programs and you can just look what's happening now. that is what the fight is about. those are the easy targets. if you look at the projections that part of the budget gets squeezed to nothing. to the extent the federal government makes investments in the workforce, in children, in basic science and research, things that will help grow the economy that is the part of the budget that is just under the gun and is getting killed right now. so more to talk about when we focus on deficit reduction, that is the way to help -- >> and this is another area of contrast. the president has proposed increases in these areas in the context of larger deficit reduction. the ryan budget would cut education 20%. would cut job worker training 20%. would cut research and development 20%. now the governor has not committed himself to those details but that is the, the position at least of the congressional republicans. >> that is nonsequitor. the key here is -- >> ryan budget. >> there has been no leadership on entitlement programs so you have the budgetary room to do the kinds of things rob is talking about. unless we get serious white house leadership that is what it takes to goat social security, medicare under control, won't matter who is president. those programs will be squeezed. >> thank you so much for your time. thank you all for your attention. like to turn it over to adam -- adam kushner, national deputy editor of "national journal" magazine and foreign policy editor. thank you so much. >> good morning, everyone. thank you for a good panel. [inaudible] so i will briefly introduce our panel and get into it. on the far end is jim -- who is on the national security council and senior vice president of the studies council of foreign relations. next is rich stanzig, who was an advisor sore to the president in his campaign in 2008. now the center forenew american security. to my right is eliot cohen who is, who, excuse me, in the state department. >> [inaudible]. >> is now a special advisor to governor romney and is the director of the strategic studies program at the school of advanced international studies at hopkins. so -- >> i will stipulate we should describe elliot as an affiliated wise men. >> and former affiliated wise man. so, jim, i will start with you, politics and the election, do you think there is any cause for hope that politics can or should or ever has stopped at the waters edge? >> well americans love to believe politics stops at the waters edge but that has been more the exception than the rule. if you look at over history of the united states, going back to one of the first contested elections, 1796, foreign policy has been something that americans have fought over. if you were to ask harry truman and dean atchison, henry kissinger or ronald reagan and george shultz, whether politics get nasty on foreign policy they would say it certainly does. >> let me start with you, rich. you were one the lead foreign advisors in '08. what do you think has been the most surprising thing the president implemented in his foreign policy you wouldn't have expected during the campaign? >> i think the most striking thing is one that i would have expected but that has gone further than i anticipated and that is the evident skill with which the president has used force on, it is an administration i think is striking for use of all tools of national security and foreign policy but the tendency for any given leader is to err in one direction or another and this president i think has been striking in his pursuit of peace and his use of diplomatic and collisional and other strategies and his willingness in key situations where american interests demand it to commit to military force. the bin laden raid is the most dramatic example of this but there are many others. >> you want to talk about how, that is traditionally thought to be a democratic weakness and how do you think that will play politically? >> this election is interesting in one important respect and traditionally democrats running for president are running as seen as weak on foreign policy. it's the issue in which they're pure seized to have a to have a lot of work to do with the american public. if you look at public opinion polls and issue that, president obama does the best on happens to be foreign policy particularly on counterterrorism. so in that sense he operated from a position of strength the bad news of the white house of course is foreign policy not very high priority for most americans today. if you look at the, standard question, asked by gallop, what is the most important problem facing the united states the answer that americans give overwhelmingly are domestic issues, jobs, the economy, social security, health care and issues like that. so the president may be operating from a stronger position than most previous democratic or incumbent presidents but may not help him all that much. >> i want to comment, elliot. i don't want to monopolize here. but i think it is a very interesting phenomenon when i joined the obama campaign in 2007 it was very obvious to everybody that presidential election was about security. iraq was the dominant issue. it was a primary position for president obama in his platform and turned out to be about the economy. what jim says is absolutely right but i do think it's striking now that everybody thinks this is about the economy it may turn out to be about security in the end because so many things could happen between now and the fall. >> want to respond to that? >> well, actually there are a bunch things i want to respond to. i agree with my friend rich danzig that a lot of things can happen between now and the fall, probably starting with an economic issue which what will happen in europe and how that spills over. largely although not entirely with economic consequences here. you know, foreign policy played some sort of role in the last election but i don't really think that was determinative. in any case i think iraq was already well on trajectory to where it has more or lessened up. i think there will be, not surprised we have a lower opinion of the obama's administration foreign policy record than richard does but i think a lot of real difficult issues basically have been pushed out. things like iran where despite sanctions and all that sort of stuff, the fact is iranians have in place as many centrifuges. they have enormous amount more nuclear material than they had. enriching to higher level. there are hard decisions that will have to be faced there. there will be big things that are going to happen in europe. our unsettled relations with china. all these are there. i would also include by the way, the terrorism issue. again i would disagree with richard. i think this administration has focused very much on one tool, which is killing individuals. including american citizens in some cases. and although that is a reasonable tool to use i think it runs the risk of narrowing the nature of the problem that we face. and i also think that the administration has made a quite substantial mistake by insisting as the president's counterterrorism advisor did at speech in my school there has been no collateral damage. this is a costless counterterrorism policy. it's not. again, let me make it very clear. i'm in favor of people who really need killing but we should not fool ourselves this has been a complete success. >> so who would you governor romney do you think as president take off those constraints and narrow the problem? >> it's, there is no question in my mind that governor romney, if he were president romney would be using force but i think president romney would also be, i think rather more focused on what we call the war of ideas. you can call it a lot of other things as well, in terms of, trying to counter radicalization. the administration has done it but i have to say in a fairly halfhearted way. there have been some improvements recently standing up various activities at state but most of the emphasis has just been on killing individuals and hoping that you can destroy the al qaeda that existed on september 10th. first i don't think you can do that. but in any case the problem in some ways metastasized. you can see that in yemen, somalia, in other parts of the middle east. so i think these problems, they're extremely difficult. they're going to loom ahead and they have not been resolved by the obama administration. >> rich seems to be describing in the abstract a kind of series of decisions that have been made about afghanistan where they turned from counterinsurgency which might not be so successful to counterterrorism. do you think, rich, that is the prudent, most practical course or do those pose a problem? >> what is so striking about afghanistan it is precisely an example of on set what -- opposite, he will i don't think was saying than the previous administration. afghanistan was widely ignored in the main by the bush administration. when we came in and central programs like training of the afghan national police, training billets were understaffed by 50%. the president far from defering the decision came to grips with it. with great clarity he made a campaign promise. he moved combat brigades to afghanistan began. he did that. he established a very clear policy with some definitive guidelines. the opposite of phenomenon of defering decisions. >> what about broader intellectual and social -- >> it is very dramatic investment in that. i think there is room for disagreement and i think eliot make as reasonable point in arguing for more counterradicalization programs, a point as far as i know governor romney has not begun to reflect on but it is, basically a program, if you look at the work that ambassador hole brock -- holbrooke opened up before he died and dan benjamin in the state department is carrying on, it is substantial activities associated with building institutions influencing populationing et cetera. then you add the credibility of the president himself in the vast reaches of the world, the vast credibility that was very low under the second president bush, you i think see a powerful program. >> a couple of responses to that. first on popularity. if you look at the "pew research poll"s, it really is not the case that we've gotten this tremendous bump up in popularity particularly in the muslim world from president obama. that is partly because of things like ground strikes on afghanistan. i have to say i have got a very different take. i spend a lot of time in afghanistan and i think there are a couple of points that need to be made. one of which is that the good that was done by the increase in resources, including troops, by the way all which have been put in plan by this administration's predecessors. i was -- >> word planned. >> by planned, when the military talks plans, as you know, it's troops to task and a lot of the logistical infrastructure, the preparing of units, the train of utes, this was all underway. i was part of that so i know that. i give the president credit for having continued it but the thing that the president did, which ended up being tremendously destructive in terms of our afghan policy was in his west point speech making it clear we were getting out. that, you know, the afghan people are many ways much more sophisticated than we think. that message got through to everybody there including the goat hearders outside kandahar. it incentivized bad behavior by everybody, by our friends, by our enemies, by neutrals, by the pakistanis. the basic understanding is, yes, the americans surged by to buy themselves some time but they are out of here i don't think you can plan for example, pakistani behavior including this latest throwing the doctor that helped get bin laden into jail for 33 years without understanding they know we're leaving. >> in terms of casting position of strength let me ask you a provocative question. what is the difference between governor, president romney's foreign policy and president bush's? >> you know what i think the biggest difference is? this take as little bit away from the discussion of counterterrorism in afghanistan but the big difference which is why i was quite happy to sign up as one his advisors, i believe president obama came in with the belief that the way you begin in foreign policy by reaching out to your enemies. i think that explains the reset with russia which failed. i believe that explains the silence during the iranian riots in summer of 2009. i believe that explains why we sent an ambassador to syria in return for absolutely nothing. of course we know what syria has turned into. i believe governor romney's fundamental point of departure, and you can see this in his book and see it in his speeches, you start with your friends. you start by consolidating relationships that you have with allies, whether it's britain or israel or a colombia. developing new kinds of relationships with countries like india and then you proceed to deal weather your opponents. i think that is, it is a fundamental, philosophical difference in how the two men approach foreign policy. >> adam could i comment on couple of things? first of all, observed what happened here, eliot, who is a very clear thinking started by observing in his view the obama administration failed to come to grips with things, constantly deferred them to the future of the as the discussion proceeded and we focused on some concrete examples they involved afghanistan where the bush administration was seven years into afghanistan, planning to do some things in the future and the obama machine station actually did them. you look at the example of, that eliot criticizes. the president says we are going to leave afghanistan. here's a timetable, et cetera. that is an example not of pushing something off in the future but coming to grips with it. the whole tenor of the discussion runs counter to the proposition that was advanced. in terms of desireability of a timeline in afghanistan, realisticly if you want to get from a war costly to america to a position where the afghanies carry it you need to establish deadlines. you need to catalyze action. failing to do that leaves it open-ended. the president did the same thing with respect to iraq. it was heavily criticized then by many. it was rather a successful policy. it has got risks with regard to it. we need that kind of closure. finally on issue of "friends and enemies", president has been remarkably successful rallying our friends. the israeli prime minister commented on how it has never been closer in u.s.-israeli relations. we worked very closely with regard to the iran issue and issue of sanction is remarkable example of rallying our allies and our friend to put a choke hold in effect on the iranians that is strangely their program. will it be successful? there are no guaranties in this world. but is it better than the alternatives? it is by far the best thing we have got. >> every president has to make affirmative decisions and make plans but maybe talk in the for the sake of election, reactive component of policy making and how that can affect a president's policy and a candidate's policy. >> interesting when you think about campaigns, campaigns are about promises about goals, about aspiration. governing is about choosing and facing up to reality. when you're on the campaign trail one of the things you are allowed to get to wish away all the constraints that make it difficult to get policy and enact it. you're engaged in position-taking than policy making. you're in office you can no longer assume away all of the things that make it very difficult. which is sort of interesting in listening to. as i listen to rich and eliot they're both sort of emphasizing discretionary element that the president or the president's team brings to any situation. from my vantage point i'm more struck by the structural constraints that limit your ability to get things done. the reason you have problems in afghanistan, you have problems with pakistan, with north korea, with iran, the reason these issues don't get solved because a, they're incredibly complex, b, very difficult, c, your leverage is not unlimited. in many cases what you discover is that even though other powers are weaker than you are they still have the ability to inflict unacceptable costs or challenges on you. i think the big question we talked about it yet as we think about china and the question is, what is the u.s. policy going to be toward china going forward? that will depend upon your assessment where china is going, where china is vulnerable to pressure or inducements and also real questions as to, the extent which you can mobilize the united states. those are big questions. it is not clear to me that either candidate has really answered that. >> if i could just, i take jim's point and i think it's right and i think there is another asymmetry you will have in this campaign which you always have when you have an incumbent. on one hand you have an organization of a couple of hundred people plus some part-timers. on the other hand you have resources of the federal government including department of state, pentagon, intelligence community and all that. so the question is when you're making a choice what do you look at? i think what you look at first, somebody's fundamental predispositions about how they view the world, how they approach things and their leadership styles. because agree with jim. a lot of foreign policy is the stuff that comes in over the transom. that you have to react to. on the matter of predispositions not surprisingly i'm much more in favor of governor romney. you get these revealing little moments like, when the president asks mr. medvedev to pass the word to president putin, don't worry. in the next term i will be more flexible. just a terrible kind of message to send, particularly to vladmir putin. i think it is a revealing moment. for the rest i agree with jim. there are structural constraints and there will be all kinds of surprises. >> if you like the message the governor is sending if we can talk about specific places and problems for a minute, how do you think a president romney is going to be able to prevent iran from acquiring a nuclear weapon in a way the president hasn't? >> i think, look, again, first we just have to start with the facts on the ground. again, maybe i'm disagreeing a little bit with jim. i think there are these long elements of continuity. sanctions against iran have been building up over a period of time. there has been a coalition in place. the fact of the matter is it is not working. it is not working or at least it is not working fast enough. i mentioned they have doubled the number of centrifuges spinning. >> so? >> there is all that. i think a lot it is going to come down whether you are credible about the threats of the use of force. because that is the only thing i believe that would cause the irina was -- iranians to stop. and you know, in fact you can see this in a recent speech by the supreme leader. i don't think they take our threats of force seriously. >> do you believe, eliot, the administration should have used force before this? >> i don't know. i don't know. all i know is, we are, i believe, getting to the point where that decision, where either the iranians will be so convinced this is going to come hit them, that they will give up, or we're going to have to face a very difficult choice and, you know, look we've had, at least, according to the public prints, administration sources, an attempt to assassinate the saudi ambassador in the united states. >> wouldn't hesitate to make that difficult choice if he felt he had to? >> no. i think, i think president romney could make very difficult choices, if he had to. but my point is my point is, if we have a chance of doing this without force, which is absolutely the preference, absolutely a preference, the iranians have to believe there is an alternative which will come their way. we just had again, according to the public prints, an iranian attempt to assassinate an american ambassador in azerbaijan. i haven't detected any reaction on the part of the administration which i were an iranian would make me worry. >> in terms of administration trying to seem serious if i could change to syria a little bit, the president delivered a very moving holocaust museum speech which he said, quote, preventing mass atrocities and genocide is a core national security interest. houla and obviously murder of women and children, 100 people there, poses a problem. does that represent a national security failure that saying this is priority and not being able to do anything about it? >> let me make a comment about iran. four rounds of sanctions, wreaking havoc on the iranian economy, clearly pushing the iranians to negotiating table is absolutely critical set of steps and i don't hear eliot disagreeing with it. it is remarkable achievement. it runs counter to the romney instinct about the world consisting of a lot of enemies. talk about revealing moments, what about russia as our number one geopolitical enemy. as colin powell said, think a minute, mitt, before you say these kinds of things. this is revealing indication of that black and white view of the world we used to have. when you come to syria, just as with iran you needed to have cooperation of russia and china and other major nations in order to make sanctions work, so it is with respect to syria, that to move forward you have got to achieve a measure of international coalition and with russian resistance in this context, and to a lesser extent chinese resistance it is a pull and tug at that takes time the administration is wise to recognize that. force is an appropriate thing to use. the administration is very skillful at doing it. american vital interests have to be involved and you have to be reasonably sure you can be effective before resorting something like. if the effect to pump up russian supplies to assad and create a world which you've got iranian surrogates working and the region gone devolves into civil war, that is not a good use of our activities. >> this is it actually, i do think this is pretty revealing of the difference between the two administrations, an administration and potential administration. so the obama administration starts off with a reset, right? a misspelled reset button as it turns out that the secretary gave to mr. lavrov. and what have we gotten in return for that? the russians have been obstructive on iran. the russians have been obstructive and continue to be obstructive on syria. the russian chief of the general staff threatens a preemptive attack on missile defense sites in europe which by the way woe don't react. russian military doctrine identifies us as their chief opponent and in return president obama's instinct is to say, please tell vladimir i will be more flexible in my second term. >> do you agree with romney's remark, russia is our number one geopolitical -- >> here is what i agree with. i agree russia is on the whole opposed to american interests. that this, that the putin regime, which is an ugly regime, an ugly regime and we don't talk much about its ugliness and it is getting uglier, is not our friend and in many ways hostile to us. and i think it is important to identify to people who are hostile to you. >> very short time. i do want to be able to talk about governing so i want to ask jim, first and second terms very different with presidents. nixon escalates the vietnam war and goes to china and reagan tears down this wall and reykjavik and bush engaged in all of them. what do you think a second term for obama might mean in terms of a med course correction? >> let me note nixon removed troops from china. he escalated it the war off the books. just be careful there. the lesson there unaffiliated wise men or people labeled as such at public events be very careful predicting second terms because presidents can surprise you. but i think the clearly the set of issues that obama 2.0 if he wins is going to face, will talk about iran, it is going to be north korea. what is the -- in asia means. let me offer theoretical threat where this is a panel focused on comparing the candidates. i actually think they are more alike than they are different. for me while they may not be in the same zip code on foreign policy they're largely in the same area code. on many issues while the rhetoric has been different and campaign is to criticize the other guy and shortcomings, traditionally democrats rail that republicans are reckless. republicans accuse democrats of being feckless. i think there will be more continuity not just of the structural demands of the situation but because the underlying ideology is not that different. this is not, we're not talking about republican nominee like ron paul who would have offered a very difficult world view. but i do want to go back and emphasizing something eliot said and is quite right. they have the same general orientation, they have different characteristics, different histories doesn't mean they would have the same outcomes. because in politics as in poker not just the quality of the cards you're dealt, it is how well you play those cards and obviously, what i really hear the governor saying is that he can play those cards better. >> we have to turn to audience questions but i want to do rapid fire very quickly from the three of you. what do you think is the most important foreign policy decision the next president will face? >> always use of force. always sending men and women into harm's way. always taking risks that are associated with force and what it means. >> i agree with that, in the near term i think the presenting issue perhaps before the new president is inaugurated is iran and particularly also the involvement of our israeli ally and its own convictions with respect to what to do. >> iran is the most important near-term challenge. >> if we can open it up for questions. could we -- do we have questions? over here. >> i don't need a mic. >> if you mind standing up. we have a mic for you. >> this is more paternal circumstance. we'll tell you what you need. >> doctor, you said important for romney would be countering radicalization of the war of ideas yet republicans have been, or romney especially has been calling on obama to be even more supportive of israel. can those be reconciled those two? >> yeah. i think, and again it is an interesting between the two presidents. if you look where president obama came in i think he moved off this by the way, he came in with the tired view that a lot of people had which is of the heart of the middle east problem is the arab-israeli conflict and therefore i have to solve it. it may well will be an unsolveable problem. that is not the heart of what is going on in the arab spring or tumult or upheaval or storm. i don't think we know quite what it is and i think governor romney has been much better, let's take those extraordinary developments on their own terms and wrestle with them which is what we're going to have to do. i agree with one of the points, actually i agree with many of the points jim made, one of which we have to recognize the limits of our control and our influence. but you know, i don't think that standing back on syria that we really helped ourselves in this area. and i think it is why the governor is right to be a little more forward leaning that on the administration has been. >> if i could ask a follow-up there. with all the stipulations that israel is a lone democracy in a hostile region and besieged by revengists in gaza, don't you think a final status agreement has to involve curtail of settlements? don't you think the president has to use influence to stop that. >> i will not lay out my personal plan for arab-israeli peace. there are a lot of people have done that and lot of people that will do that. what i will say what have been the circumstances which the israelis pulled back? like withdrawal from gaza which was done by a right-wing government. when they had personal trust and confidence in the president of the united states. and although, yes this administration has delivered military aid and so forth to the israelis it is simply not true that the israelis, senior israeli leadership, political and military leadership has a lot of trust in president obama. that is just a fact. >> could i just comment on first this it idea of control and limitations and how personality matters. i agree with jim and eliot that much is constrained by personality clearly matters. the decision about afghanistan, the president talked about, the decision about iraq emanyonemations of his own judgment and represent indication of a personal involvement that matters. when you look at the decision on the raid on bin laden in pakistan the recommendations coming from your advisors are divided in many respects and a tough decision is made which is a real chance of failure and the president made that tough decision and he made a correct one. 30% nalt really does matter in these contexts. i'm not sure governor romney begins to understand this. eliot talks about revealing moments. i mentions the russia geostrategic number one threat. here is another one. if i'm president i would listen to my generals. among other things eliot cohen written a wonderful back how presidents have to make decisions between generals. it doesn't work that way. really individual personality matter. >> we have to keep taking questions. >> well, first what is the alternative? i'm not going to listen to my generals? he didn't say i will do what my generals tell me to do. it is pretty clear and look at david sanger's recent stories in "the new york times" to some extent senior military leaders were not particularly heard in the most recent decision-making i know general officer of the united states military who likes to see troops withdrawn from afghanistan in the middle of the fighting season there. it makes no sense. >> eliot, classic romney. i would listen to my generals. what does that mean? if i means i hear them, of course president obama does that. he implying something else without committing himself to it and what he is implying will follow military advice and mislivedding view of the world. >> i'm sorry, that is not how he thinks about -- president romney is a, governor romney is a -- no, no. well, this is somebody who has spent his entire career listening to experts about all kinds of things. >> absolutely true. >> and than making decisions about whether they are right or wrong. somebody who very much has his own very clear views which you can find in the book he wrote himself and that is i think where he would go. the idea that this guy would be a pawn of anybody, of any adviser, military or civilian, it is just not true. >> take one more question. right here on the end. >>> yeah my -- [inaudible] >> we have mic for you right here. >> hi. i'm with boxy. i want to know if you guys can expand on relationship with latin america and how both candidates will tackle free-trade agreements? >> if i could, governor romney has talked a lot about it, again this is actually a case where we know of a concrete issue. governor romney from the very beginning in favor of getting that free-trade agreement with colombia through congress. it had already been cooked in the previous administration. he was pushing it and pushing, you know, similar arrangements with other latin american countries. this administration delayed three years and finally approving a free-trade agreement with an extremely important ally of ours. makes no sense. >> first of all the administration has been very energetic and forthright on trade in the latin american context. the trans-pacific partnership, an initiative developed by the administration which involves the west coast of latin america and the eastern part of asia is i think a remarkable initiative that will lead to expansion of free trade throughout the area. the colombia free trade pact and the other two free trade pacts had all kinds of difficulties in congress the administration persevered in getting them passed. the president invested in personal relationship with the president of brazil which is exemplary which personality in these conflicts matter and you can't just listen to your experts, et cetera. it has had real rewards. the colombia relationship is stronger than it every has been. it has been successful of cooperation on security as well as trade. >> maybe we have time for one more question. all the way in the back there. sorry. did i see a hand? >> [inaudible]. >> for the audience at home. >> thank you. embassy of south africa. i like to ask the panel their comments on the respective candidates africa policies, policies and how you might see an obama administration's policy towards africa changing in the second term and also the romney campaigns policy towards africa which the campaign hasn't been too vociferious on that. thanks. >> i'm afraid you got me. you know, i have not paid attention to the romney campaign's africa policy pronouncements. again, there has been state ad number of times. a campaign is not a parallel administration. we're not like great britain where you have a shadow of the go. i think you know the kinds of prince millions that governor romney would be in favor of, which would be, openness in free trade, human rights and strengthening relationships. i don't know that that, to be perfectly honest is there a stark divide between he views africa, and how president obama views africa, i would tend to doubt it. >> one comment on general principles and prince pills on africa. in romney campaign to divide the world between enemies and friends and lots of bluster is a very good thing. my view this administration has shown you don't proceed successfully that way. you proceed successfully by engaging in people across the whole framework but acting with force when required or with compulsion and in means like the sanctions in iran that don't involve physical force but involve other means of compelling. with regard to africa there is an example of this in the way we have rallied the organization of african unity to try and police and be active in the sudan. very imperfect and bad results in many dimensions but better results than if we directly intervened. the administration is also moved towards ago cultural policy in africa in terms of enriching agricultural investments that i think is at the very core of our modern understanding of development. development is led by agricultural things first and foremost. eliot questions the degree to which the president is popular in the world at large and how that translates to the u.s., you see the adulation in among other places in south africa for president obama. i think it is powerful and effective force for america. >> gentlemen, before i pitch to my colleague ron brown, editorial director of the nj. give a round of applause for rich, john and eliot. [applause] >> thank you. all of you have sat through a incredibly nutritious course. two panels on difference between domestic and foreign policy between president obama and mitt romney. now comes the dessert. >> a bunch of twinkies? >> exactly before either man can implement policies in 2013 they have to win election in november. for the final panel we'll, more how the issue debate will affect the election campaign. to do so we have a joel, who is the president of the benniso in strategy group. -- president obama and advised a array of governors, and mayors. [inaudible] -- most unexpected result. kevin is advisor to the mitt romney campaign in 2008. as a campaign's national press secretary and communication strategists, -- former press secretary john boehner and vice president of jda front line, -- he had quartered in charleston, south carolina. >> you're all invited down. >> we'll meet at hank's. peter brown is assistant director of the quinnepiac university polling institute and of their ubiquitous battleground states and national polls which make quinnipiac most unlikely household words in the political world. has experience covering white house and presidential campaigns for upi and scripps howard. welcome all. as we heard over the last hour there are very substantial differences between president obama and mitt romney on a range of issues. of those differences, which do you think will be the most important in shaping the general election campaign? kevin? >> i think it will come down to, first of all, let me thank everybody for being here. i really want to thank skbrol and peter. it has been a pleasure to be with joel, one of the best in the business and so is peter. i'm very grateful to be up here with them. and ron as we know is one of the best journalists in the business. bothers me with phone calls and best to do this in public. usually i cover the phone and roll my eyes but now i can't. it really comes down to the view of the role in government. if you look at economic debate. if you look at the health care debate we've had in 2010 and i expect we'll continue to have in 2012, i think also with the recent arguments about free enterprise and the governor's, the governor's background and comparing it and contrasting it with the president's experiences before he became president, i think the role of government is going to be one of the big differences. fundamentally republicans believe and governor romney believes that the role of, the role of the government is to encourage and incentivize the private sector and individuals in the spirit of american entrepreneurism to help grow the economy and america to prosper where as we see the obama world view as being one where the government has a central role in the deciding the winners and losers in the economy and the central role in the american individual's life. and i think if you look at all the debates, economy, health care, even sometimes issues like, obviously other issues that will be important, related to the economy like energy i think it is a dissimilar contrast we have. >> what is the difference to voters? >> i think the most important difference and it is proving itself more stark every day, what are the values that form the vision each of these men bring to the case and because of that, it's going to come down to who is going to basically fight on behalf of the people who have been struggling the most, who have been fighting hardest to get back to where they were before this economic crash happened and who is going to create an economy that is built to last, that will restore middle class security and do that through smart invests in entrepreneurship, in small business, manufacturing, education, research and development so that the folks who used to be able to climb up from the working class to the middle class can do so again. i think those values, that contrast is pretty stark. i think they take two approaches. president obama very clearly believes we need to have economy that gives everyone a fair shot and everyone does a fair share. mitt romney through his life and his career in business and governor and policies is very clearly beliefs if we take care of those at the top, that is what we have to do and everything else will take care of itself and it hasn't worked. >> peter you heard incredibly different summary of idealogical frame. there are other frames. but idealogical frame each side wants to put on the election. whose side are you on? is government the problem or the solution? which is the, are either one of those frames inherently more relevant to voters especially swing voters? >> i think firstly there are two sides of the same coin frankly. let me do one thing first. to thank "national journal" for giving me a ph.d in this area of resume' enhancement i will be very clear. i don't have one. actually to protect myself. two sides to the same coin. you've got the notion the way kevin expressed it, this is about the role of government that joel says, this is about who is on your side. same thing. this is about the economy. the economy, my, one of my stock lines is the economy issue 1 to 1129. everything else is after that. the economy is a lot of stuff. it is unemployment. it is the debt. it is health care. it is a whole host of things and, what kevin and joel did is just give you, as ron said, the idealogical spin for both sides on how you argue the economy but it's the economy. you don't have to be stupid to think that. >> inherently more persuasive, does either one inherently matter more especially to swing voters? the idealogical role of government or, are either one of those inherently a more persuasive argument? >> no. i think what is more persuasive what voters think will work. often, elections in swing states are about who is closer to the idealogical center. some elections are like that. others are not. this is one where swing voters will be moved not by ideology but by who they think can solve their problems. >> good point. let me follow up on that. one thing i've enjoyed in the quinnepiac polling is the question you've been asking all the way through in the swing states especially, regardless who you intend to vote for who would do better job on economy? you've been asking that comparing romney and obama. generally speaking romney runs even or sometimes ahead. frequently ahead in the swing-state polling. what is the basis of that advantage at this point do you think? >> well, first of all, you're right, we asked another question to them, which is, is president obama likeable or not. is mitt romney likeable or not. very simply put the president think president is more likeable. the romney is the better on economy. the question which wins out? if i knew i would be in vegas. >> what do you think is the basis of his advantage currently on the economy? is it kind of a shadow of dissatisfaction with obama? is it kind of derivative of dissat action with obama? inherent credibility of business background? why do you think he polls well? >> if unemployment was 7% this wouldn't be issue. obviously a derive of where the economy is in the eyes of people. that drives it. >> joel, can romney sustain the advantage that poll, and a number of others generally have him even or slightly ahead in many polls today at least who can do a better job on the economy? i understand there are other dimensions who stand up for the middle class, obama is ahead. broad question of who can get the economy moving, romney is even or ahead. can he sustain that advantage? >> i don't want to take your question. you glossed over the other questions that are relevant. just as peter said, take peter construct, questions 1 through 120 are the economy. there are components how people contextalize on the economy. not just who they think has good ideas on the economy. who understands problems people like me facing. who will put middle class people's interests first. who will make sure there are not two sets of rules, once for those at to and for everybody else. those are variables that go into the ecase. not just whether people like president obama or not, although they do, it is why his job approval ratings have been higher. it is why people's economic confidence ratings over the past few months are also higher. going up, the michigan consumer confidence index is higher than it has been in years. the biggest percentage increase since, since election day of any president in recent times. there is a confluence of factors people bring to the discussion of the as neatly we would like to answer them all with one poll question or another, that is not howl people make their decision. >> if you look at poll numbers, it gives you divergeant assessments where obama will have significant advantages standing up for the middle class. carrying, promoting policies, that hel all americans. on this underlying issue who might get the economy moving faster, romney has an advantage where, as you kind of look at that, as you say there are many factors go into people's decisions. how do you kind of assess that kind of landscape at this point? >> i agree with a lot of what peter and joel said. i think it comes down to the question of, i think we have this attributes versus issues question. i think fundamentally this is going to be, and agree that the president we've seen it in a lot of polling, the president does score very well but people judge him harshly on his performance. i believe this election will not be eharmony.com election but a monster.com election. it will be judgment on the president's, is this somebody i really like or somebody who can get the job done? ultimately elections are still job applications. and the president has a hard time selling an argument of economic optimism when he is, when at the same time, people aren't feeling it. the numbers on whether or not people feel that we're in recession, whether you, let's not let economists ruin that argument in here, whether or not they feel that the economy is in recession it is very high. even though it may technically not be the so i think if a president at the same time who has a giant canyon between his message and the way people feel. that is one. reasons why governor romney is, is doing well on the issue of the economy, which is the central issue of this campaign because he is talking exactly what he would do to address the enormous anxieties that people have about everything from rising costs to stagnant growth. we saw numbers come out today, that revise down the gdp under 2%. and we have job numbers come out tomorrow that aren't going to meet the growth of population as it relates to job growth. those are i think the big, those are the big dynamics that are driving these numbers. >> joel, go ahead. >> look, let's take a step back. i agree let's not debate whether people think it is a recession or economists think it is a recession. the fact of the matter, what american people know and way they approach this election right now they understand we didn't get into this crisis overnight and we're not going to get out of it overnight. they have understood that since 2008. the reason that is real intangible for them, if you go back and look at polling done after the 2004 election, working in middle class americans already knew then that things were out of whack in the economy. things had fallen out of balance. places like massachusetts where governor romney was governor, during that time period their incomes went down under his governorship. so if he is running as mr. fix-it and you have a governor that took the state from 36th in job creation to 47th and saw their state lose 40,000 manufacturing jobs while he was governor, twice the rate of the national average, you got a pretty tough argument to make that you're mr. fix-it. >> peter, let me ask you, as you hear here, as you see starting to with bain moving to the massachusetts record the obama campaign is trying to challenge romney's credentials a job creator or someone on your side. basically make the case through his private career and career as governor looked out for the few at the expense of the many. give you said that romney's strength on the economy is largely a factor of dissatisfaction with obama, how effective will this line of argument, how effective can it be to raise questions about romney's credentials who are also dissatisfied with obama? >> look everything matters at the margins, on the economy, the question isn't what the unemployment rate, or gdp rate number is, it is what the people in quinnipiac land, ohio, florida, virginia, what they think, what they think about their lives, is it getting better, is it getting worse, who is responsible? . . >> there is a large increase in, you know, the november to early march period in economic optimism. that's plateaued. it hasn't gone down, but it's not growing like it was. so that's why we're seeing national polls that are essentially a dead heat, swing state polls are a dead heat, a dead heat. >> i think we all agree on that, it's real close. [laughter] >> joel, do you -- how significant is that forward-looking assessment in terms of whether people are going to be willing to give the president a second term? >> yeah. i think people are very forward looking. i think they know we've gone through an unprecedented time in the lives of most americans who are going to be voting, a small sliver who were alive during the depression in the '30s. but they are making a forward-looking choice. they've gone through tough things, they feel a lot of the things that happened undermined their security, their ability to, you know, pay for college for their kids, dealing with credit card companies who, you know, suckered them into credit card rates with rate changes in the dead of night. i think they're going to look at both what president obama did to fix some of those things, rescuing the auto industry which governor romney said let 'em go bankrupt. there was no private money for them. the only way it could have been saved was the way president obama did it, and he did it by getting concessions from the companies and the unions to go forward. and i think people understand that we are going forward. everybody knows the progress hasn't been as rapid as everyone would like, but they want to be on a path that's going to take us forward, and i think the last thing they want to do is go back to the same kind of policies that didn't work when governor romney was in massachusetts based on his record and that he's proposing to do all over again. >> kevin, in the primaries health care was an issue between romney and other republicans. as we've moved into more of a general election mode, it hasn't come front and center yet. if supreme court strikes the law in the next few weeks, how do you think that changes -- >> it's interesting you say that because i remember i had lots of coffees, lunches, dinners with so many reporters, and they said, look, the tea party's never going to nominate a guy who with romneycare in massachusetts. and i remember saying over and over and over all through those meals that health care will be an issue, it will not be the issue. and i think that was largely proven through the primary, through the primary contest. >> [inaudible] [laughter] >> it's no longer meals, just drinks. [laughter] >> anyway -- >> so, i'm sorry, i was just trying to segway to my other point which is i think the public opinion on obamacare has calcified. i don't think there are many people out there who have a persuadable opinion on this. they either like it or hate it. in many ways it's become swim symbolic of how many voters view the lens of, how they view the obama administration through the lens of that particular bill. it was very expensive. it was a chaotic, partisan process. it was too big. it's not -- it hasn't done what it had promised to do. so i think any relitigation of it is bad for the obama administration. >> joel, if it is raising more visibility, would that compel the president or other democrats to defend i more visibly than they've done in. >> i think a lot of how the discussion takes place is going to depend on the court and what they say. the fact is it's an issue, it's not the only issue. to the extent it becomes part of the campaign, again, it's going to be an issue through which voters are going to be able to assess very clearly the values of each candidate. do you believe insurance companies ought to be able to deny coverage to people with pre-existing conditions or not? do you think they ought to put lifetime caps on you when you've worked your whole life, but now you're in your 50s or 60s, and you're sick, and they're going to cut off that coverage. >> same decision we started with, big government, who's on your side. peter, one of the things that benefited republicans in recent years is a steady movement in their direction among older whites, especially white seniors. 58% of whites 65 and older voted for mccain in '08, 63% of white seniors voted republican in the 2010 house elections. on the other hand, we are seeing consistent resistance in polls to the idea of converting medicare into a premium support or a voucher system which governor romney has embraced, even when the option of allowing people to stay in conventional medicare is described. so let me ask you this, how big a threat to the republican gains among white seniors do you think, if at all, governor romney's embrace of the ryan-esque medicare proposal will be? >> well, on the assumption that the court does something to stop implementation, then both candidates will have to say what they're for. now, i assume that the governor will be for allowing or making sure that people with pre-existing conditions can get health care. you can be pretty sure the governor will be for not having lifetime caps, and if they are, they're going to be astronomical, so that if court throws out part or all of the law, the two candidates are going to have to say then what they're for. not what happened in the past, what they're for. and, you know, one assumes on the goody stuff, the stuff that everybody's for which is not lifetime caps or, certainly -- >> but it's not clear you can do those things without an individual mandate. >> but it's certainly clear you can say it in the campaign. [laughter] >> well -- >> that'd be hard to do when you knew why you put it in in massachusetts. >> i go back to medicare, about converting medicare to a premium support program. joel, in the movement among democrats with older whites, it's been intense under obama. how big an opening does the medicare debate allow you to begin to talk to some of those voters who have been moving away from you? >> look, i think, you know, the difference here is the president's approach on medicare as it has been on most budgetary issues is we have to take a balanced approach. i find it ironic that when we find savings through fraud and all the things republicans have talked about on medicare in revising payment systems for providers, the republicans ran a campaign against obama cutting medicare. so the president has always taken a very balanced approach to how we take programs like medicare and make sure that they're stronger for future generations than not. i think an issue around vouchers and changing what has been a guaranteed benefit for seniors is going to be a prime discussion during the course of the campaign. and i think it's going to play into it because it's going to reflect an approach that extends beyond that to other issues. >> kevin, as republicans are doing better with these older whites and it's possible even with this -- or romney could win 60% of white seniors, that would not be inconceivable there the poll being, would that make it more or less likely that a president romney and a republican congress would pursue a ryan-type vision which is still heavily resisted by -- even though they would be exempt -- all polling shows they're very cube crouse -- dubious -- >> i disagree with the notion that you have proxy debates over legislation that is named by somebody else. i really do believe oftentimes you have the opportunity to talk directly to voters about your framework of principles and the reforms that you would support. i think the governor has talked about a lot of the principles that he agrees with, whether it was, um, ryan or some of the other debt commission recommendations as framework reforms he would like to pursue. and i think that's where we go back to a value-driven debate. you can win a lot of these seniors and the larger swath of the electorate based on what you would do to change the way that the status duo is operating right now -- status quo is operating in washington. and i used to get that all the time early on when the ryan bill was being proposed or there were debt limit different proposals up on capitol hill, we tended to resist the idea that you had to come in and have an up or down, yes or no on any of these discussions that were having place in washington, d.c. and instead talk about what it is you fundamentally believe as far as government reform, deficit reform to people outside of washington. because they're not stuck in this motion to recommit mentality up on capitol hill. >> can i add one point to that about your question to kevin? >> yeah. >> i think you want to focus, again, on the medicare issue and how that relates to seniors and the whole ryan budget. there is a related issue to the ryan budget and governor romney's embrace of it, if you will, which is that it's going to blow a massive hole in the deficit, and for a lot of those older white voters, they're also going to be concerned about a plan that gives away more tax cuts to millionaires and billion be theirs that aren't paid for, that's going to add $5 trillion to the deficit. that's going to be a problem for them to defend. whatever argument you want to have, that piece is going to be impossible for them to do. >> if we're having a debt and deficit debate from here until november, we're going to be in an extremely good position to win. >> before we go to the audience for questions, let me kind of sum up this part of our discussion. when we think of that last 8 or 10 or 12%, whatever the number is that are truly out there and persuadable voters, how important are these issue differences in, ultimately, driving their decision? especially as you compare them against other factors like performance, like assessment of these individuals? how important are how closely the candidates line up to what voters want on issues is the ultimate choice they make? maybe, joel, swing voters that are left. if you could start us on that. >> i think every voter who is still undecided and who is still soft on who they're going to go in and support are going to be critical to the efforts that are going to be made by both campaigns. you have to have a clear sense of who they are, what kinds of things are important to them, what's going to persuade them. we think we have a pretty good handle on that. we feel pretty confident about where we head towards november with those folks and that the contrasts that we're talking about in terms of our economic vision and our economic values and going forward is going to be pretty favorable for us. >> and tissue con -- the issue contrasts the key? >> again, i think the issues illustrate who you are, what you stand for, what you believe in. and i think those issues become great contrast points for us whether we're talking about giving $60 billion in tax subsidies to oil companies again which president obama doesn't want to do, governor romney does. whether we're talking about undoing wall street reform which governor romney wallets to do and president obama doesn't, i think those issues become a framework for where you're going to take the cup. >> peter, how do you assess performance, personality issues? are they separate? >> they're not separate, joel's right. but they have different, in different years they make up different, you know, percentages. i think this is a year where personality is not as big a deal. the president does have an advantage. but here's the other thing that's important, the 8 or 10 or 12% are different people in different states. in colorado they're a lot different that ohio. in virginia they're a lot different than florida. and i think that -- so there's just a different way of going after these people in different key states. >> okay. so personality's less important, but performance and issues. the backward-looking referendum, how do you see the relevant -- >> i'm not sure i understand. >> you said personality's less important, but i want to ask about the forward-looking debate about what each of them would do over the next four years versus the more backward-looking assessment of obama's performance and romney's record. >> i think the backward-looking assessment sets the question in voters' minds about who do i give more stock to their ideas. so you can't do it separately. they're part of a -- >> i see it as sort of big versus small. i think, um, amazing to me having watched the 2008 campaign that barack obama ran, which he ran as a centrist about doing very big things and bringing transformational change to washington, and what we've seen in the 2012 campaign is it's sort of been driven by a lot of micro trends. let's say this about student debt, to this to women about contraception. and i think that's been quite a difference for me. and i think the campaign that's going to win, that's going to persuade those last 8%, it's going to be the campaign that is forward looking and the campaign that's talking about big things. that's why i feel like we're at an advantage right now because for all of the scrutiny that we sort of expect on the governor's record whether as governor or whether he was in his business sector, they're talking about things that happened in 1994 when voters are very and acutely focused on what's happening in 2012. they want to know what is my life, my economic situation going to be like, my prospects for the future going to look like on november 6, 2012, and that's what we're tremendously focused on, and we're going to try to keep it a big discussion about the direction of the country. >> quick point to the audience? >> i would reject kevin's promise that we're focused on small things. president obama went out as early as november and said this is a make or break moment for america's middle class and those people working to get there. and this is going to be a challenge over and a fight over who's going to create an economy that's built to last which means it's durable, it's long term, it's got real jobs, it's not about making a quick buck, having a bubble economy. it's about the kind of american economy that working people, middle class people in america expect and deserve. that's -- >> and just, you know, i just see that a lot of folks were saying, well, let's get this persuadable voter by tweeting this or making a big deal about this gaffe or this youtube, and i think a lot of that -- i don't think those persuadable voters are -- >> presidential elections are about big things, i agree with that. let's go over here for the first question. and i'm going to reserve the right to ask one final question after the audience. >> i'm a reporter with catholic news service. how does either the voter or either campaign take into account what any president can do looking backward or looking forward with congress in gridlock? does that enter into people's thoughts about how they're going to vote for a president? how does that enter into the way you campaign based on you might have the most wonderful ideas in the world, but if you can't get it through congress and may not be able to get it through congress if congress remains as intransgent? >> there is no question that -- >> i'm sorry, did you want to go first? >> no, no. >> there's no question that voters come to the process today with heightened cynicism for a host of reasons. the 24/7 news cycle, they get enpublish meshed and immersed in it. it's viral, it's vibrant, it's arguing nonstop on television in their faces. they bring a lot of cynicism. they also recognize that, um, congress has put impediment up after president obama. i'm not saying that becomes determinative in how they decide, but they know it. it's why the ratings of the republicans in congress went down by about 20 points from the month they took over the majority in the house to where they stand today, and it's never moved. so you have got an electorate out there that's very mindful because of the last three years that what a president says doesn't just get done whether you have democrats in congress or republicans. it's very interesting, i will tell you, i don't know if you've seen any polling data on this, but i've seen some. two-thirds of americans think the republicans control congress even though we have a split house because, effectively, they do. the filly buster in the senate has enabled the republicans to control the agenda in either house for a couple years. >> we haven't asked this question in this cycle, but i will tell you in previous cycles americans think they like divided government. whether they believe it or not, whether they vote that way or not, that's what they say. >> right. we've had results to that effect as well. unclear what it means. >> good morning. my name's dave, and my question's regarding small business and most job generation coming from small business. could the panel, please, differentiate the difference between the candidates relative to the policies supporting small businesses? >> yeah, sure. well, i think governor romney believes that if you look at the way he's talked about the tax regimes that we have, the regulatory regimes that we have and, um, just the overall world view of what government's role is in helping spur and development in the private sector, you know, he believes that we should have, um, more of an incentivize businesses to make better decisions and to grow and to hire more people whereas i think the world view that we believe that the obama campaign has and the democrats have is they off view the business sector as one where they have to take a punitive posture whether it's the tax regime or the regulatory regime as far as success. i think that's one of the main differences we have. you look at obamacare as a vehicle for that discussion. there are taxes and regulations in there that are hurting the ability for small businesses to plan and to grow. and that's the kind of debate that, um, is effecting a lot of these local, regional and even our national economy. >> the reality is that president obama has cut taxes and created tax incentives for small businesses close to two dozen times in his administration, and they're working. we've had over 24 months of rite sector job growth that are happening -- private sector job growth that are happening with small businesses. we have manufacturing growth greater than it's been at any time in 15 years. these are small businesses. the reason is because we believe, unlike governor romney, that to spark and spur manufacturing and small business entrepreneurship you have to invest money in research and development, you have to take those incentives that allow them to take risks, you have to headache sure there's lending there. we just signed a bill that, fortunately, had bipartisan support, president obama on renewing the export/import bank. we had to fight with republicans over. there's never been a fight over whether or not we want to make money available to small businesses in america who make things that we can sell overseas. so i think when it comes to looking at both our track record and what we would do going forward with small businesses, there is nothing punitive about saving the auto industry. so i think we've got a pretty good record and a pretty good contrast. by the way, again, when you want to go back and look at the record of what happened, governor romney in massachusetts, i don't know if he thought it was punitive or not when he cut over $400 million in investments for manufacturing, but i'm sure there's a cause and effect between doing that and ending up with manufacturing job losses at twice the rate of the -- >> i want to squeeze one final question. can we get one last one from the audience before i -- yes, hold on. right here. if we can get the microphone to the front, and then i'll ask my last question. >> capital insights group. i have a question about the tom mann/norm ornstein about the book argument that the republicans are really the problem, and i'd to know whether that's made any difference in the political debate since it happened and give you a chance to comment on whether you think romney agrees with that or how you might parse that finding that mann and ornstein said. >> so, you know, i think without phrasing it as the problem or the -- there's no question that both parties are more ideologically hi among now than they were a generation ago, but the process has advanced much further on the republican side. the democratic side from the electoral base upward is more of a coalition, they rely more on the votes of moderates. the republican electorate is more homogeneous, racially, ideologically, pretty much in every way, and that produces a more uniform kind of et of elected officials -- set of elected officials in washington. and as a result there's greater centrifugal force today, i think, in the republican party. there is greater pressure against kind of, um, concession to democrats as part of building, um, coalitions to get things done. and that is a reality that i think that, um, a president romney would face. i don't think, you know, i don't think norm and tom mann have really had a big impact on -- >> [inaudible] >> the collective thinking of the house republican leadership, but i don't think they're -- if you don't put, like, kind of a pejorative spin on it, they're not telling john boehner anything that he doesn't know. i mean, which is that generally speaking the republican electorate is more homogeneous today than the democratic electorate. while still having different opinions, it's more homogeneous than the democratic caucus, and that's producing a kind of real ideological push that makes, that creates greater resistance, i think, to, you know, deals with the other side. when every republican got off on the no one raised their happened when asked if they would take a 10-1 spending cut to tax increase deal, it was a reflection, i think, of all this from the base up. >> just real quick, i haven't read the piece you're referring to, but the president had both houses of congress democrat for years, and he produced a bill that the public continues to reject, obamacare, and he had a democratic senate that voted against his bill in unison. so they haven't passed -- i'm sorry, the budget, they haven't passed the budget, in, you know, how many years? >> i think you asked him its effect? in ohio, in florida, in colorado not only have 99.99% not read the book, they haven't heard of the book. i mean, it's one of those inside the beltway things. >> my final question was actually kind of related to that which is for the last hour and a half we have heard that -- and we have seen evidence -- that romney and obama are deeply divergent in the path they offer to the country. i mean, the two parties are at least as far apart on the big domestic issues, on the domestic side as they've been since at least 1980, if not 1964. on the other hand, the other thrust or thread that we've had through this conversation is this could be an election that divides the country almost exactly in half with whoever wins winning by kind of a tipping point margin at the presidential level, maybe at the senate level. the likelihood is everything will be more closely divided after the election than it is today, so my question to each of you is when the parties are so deeply divided but the country is so closely divided, what -- how does that work? i mean, how are we going to go forward in 2013 regardless of who wins if we have kind of a tipping point congress, a sheriff closely-decided presidential election and yet there's an enormous gulf between what each side wants to do? >> in january 2009 president obama had won an electoral mandate, and you don't get to 70% without some republican support, a big chunk of independent support and having built up your base on the democrat side. i think that was very quickly scwawppedderred because -- squandered because for someone who had promised to gone as a postpartisan, i'll never forget when the president went down to the democrat retreat in february of 2009 and offered one of the most partisan indictments of republican what was principled, substantive opposition to the stimulus bill, you know, only on the first couple weeks of his administration. i think the failure there was to really -- they had mastered the package gentry of centrism, but it never really mastered the practice of it. but and i think, you know, whoever wins this election has to if they want to tackle the big, enormous challenges we face in the country has to go about building up that credibility not only with republicans, be -- but with a great number of independents and democrats depending on who wins. the president squandered that opportunity very early on. >> would a very narrow result, a 49.9 to 49.1 result in the presidential race, would that be a reason for the winner to adjust their agenda to try to reach out to the other si because the country had been so closely divided? >> i think you have to adjust all of your goals in order to -- you have to do whatever you can in order to reach your goals because right now we stand on the precipice of extraordinary economic challenges, we have national security challenges that are out there that the public's not paying attention to right now. that may change over the course of this campaign. but, yes, there's going to have to be an ability to really forge both political consensus up on capitol hill as well as public opinion consensus. >> joel, what would a very narrow divide mean for the next election? >> let me first give a little vetting of kevin's context on partisanship. first of all, when president obama was elected his approval rating and his favorable rating and his vote total were all around 53%. the 70% in january was never a concrete approval rate, it was euphoria in this country about the fact that the country had just done something extraordinary. and our numbers came down very quickly because they were going to settle back in along some kind of partisan lines. and i applaud kevin. he's great, he does a great job at this, but maybe he missed the video clip of mitch mcconnell standing up in front of the country and saying our number one priority is to defeat president obama. so i think, you know, in terms of who worked with whom, when the president gave his jobs speech last september after begin failing to agree on a balanced approach to deficit reduction when the republicans couldn't get a single vote for, as they put it, $1 in 10 out of tax increases. what president obama said in his jobs speech is true. he put forward ideas that were supported by republicans and democrats in the past, and still republicans rejected 8 out of 10 componentsing in the jobs bill -- components in the jobs bill. i think what's going to happen with the next election, i think both sides know what tom mann and norm were talking about on the broad scale. what the woman over there asked about, that there is frustration, a cynicism about the way things work in this town. both parties in congress are going to have to figure out how to go back to days when they did work together, going to have to get over things like the filibuster and going back to majorities being able to vote for things and getting things done. i think the american people if you get to 2014 and they don't fix that, they're going to punish people again in -- >> peter, what's the lesson the next president should take if the result is razor thin in november? as it looks like it may be. >> i'm quite pessimistic about the ability to produce a leadership structure that will make massive change in the country. and if he does, whoever wins does it by themselves, without the other party, i think that's certainly possible. and i would, something to think about, it's not an exact analogy, but what has happened and is happening now and will culminate next tuesday in wisconsin might well be a foreshadowing of not necessarily the exact results in terms of what policies, but how difficult it will be in this country to have a civil conversation about anything that matters. >> when you are closely and deeply divided, that is a volatile combination. you have been a great panel. i will correct the historical record only slightly to point out, joel, when mitch mcconnell made that statement, he was quoting a national journal magazine -- >> i'm sorry. [laughter] >> nay major garrett. join me in thanking this terrific panel. thank you for joining us, and we hope to see you again at other national journal events including our next take on the issue at the conventions. victoria? >> thank you, ron, and thank you to all our panelists. we have a number of events we will do throughout the year, and we welcome you to all of them. we'll be continuing these discussions at the republican and democratic national conventions. if you're interested in joining us, please, give us your contact information, and we'll keep you informed. we do have a couple of events coming up, one on june 7th where we'll be covering the economy, we welcome you there, and we have a wonderful event coming up on july 18th where we will be taking a look at how women continue to reshape the economy, politics and issues around the world. and we welcome you to join us at that. thank you again for joining us and thank you, again, to shrm for the be generous support today. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> we have more live coverage coming up today on the c-span networks. on c-span 3:1:30, the focus will be on the oil and gas-drilling technique known as fracking which has seen a recent boom in pennsylvania and other states east of the mississippi. the environmental protection agency has been conducting studies on the practice to see its impact on water supplies and possible links to localized earthquakes. that hearing will be live at 1:30 eastern on c-span3. and coming up at 2 p.m. a house homeland security subcommittee looks at tsa inspections of trucking and rail industries. witnesses include the chief of police for amtrak and the chief operating officer for greyhound. that hearing will be live right here on c-span2 starting at 2 p.m. eastern x. with the senate out all this week we're featuring some of booktv's weekend programs in prime time here on c-span2. tonight a look at politics and corporations. and starting at 8 eastern prettier prize-winning author steve coll goes inside one of the largest corporations in the u.s., exxonmobil. at 9 p.m., bryce hoffman examines ford's ceo alan mulally and his bold plan to save the auto manufacturer. at 9:45, harriet washington discusses what she called the modification of the human body by big pharmaceutical companies. her book is called "deadly monopolies." booktv in prime time all this week here on c-span2. >>> spend the weekend in wichita, kansas, with booktv and american history tv. saturday at noon eastern, literary life with booktv on c-span2. robert weems on american presidents and black entrepreneurs from "business in black and white." and dennis farney on the founding of beach craft in the barn stormer and the lady. and sunday at 5 p.m. eastern on american history tv experience early plains life at the old cowtown museum. the early days of flight at the kansas iowauation museum. -- aviation museum. also two airports from the civil rights movement. in 1958 they sat down for service at the dockham drugstore. once a month c-span's local content vehicles explore the history and literary life of cities across america. this weekend from wichita, kansas, on c-span2 and 3. >> sun on q and a -- >> i think the problem is with walter cronkite, people see him as only the avung lahr, friendly man, but there was another side of him that wanted to be the best. he was obsessed with ratings, of beating brinkley report every night, and he's probably the fiercest to -- competitor i've r written about. cronkite's desire to be the best was very ro announced. >> best selling author douglas brinkly on his new biography of long time cbs news anchor walter cronkite sunday at 8 eastern here on c-span. >>> coming up next, remarks from anne sweeney, the head of abc and co-chair of disney media networks. she recently sat down for a discussion on the future of television with "wall street journal" deputy managing editor alan murray. this is about an hour. [applause] >> thank you. advanced digital strategy, sounds like manager we all -- something we all need. [laughter] anne, thanks for coming, especially right on the heels of your up fronts. how did they go? >> well, first of all, good morning, america. [laughter] and i'm sorry -- >> we'll get to that. >> yes, i hope we do. i'm sorry we're missing the second hour because you're here with me. the up fronts went very well. we're looking at a strong marketplace. as bob iger reported in our last earnings call, we were coming out of a strong quarter. we see a lot of new product launches next year, and on the abc front i am very proud and very encouraged by our strong schedule across the board. prime time, news, daytime, late night. >> you had a good line, you said that our bachelors don't stay engaged -- >> but our audience does, yeah. [laughter] >> that works. and jimmy kimmel had a line there that got him in a little bit of trouble with les moonves, he says that cbs is big with the 18-49 trips to the bathroom demographic? >> that's not true? [laughter] >> well, the numbers i look at says cbs is doing pretty well with the younger demographic these days. >> but cbs does well in total viewers, and i give them great credit for a lot of the shows they've put on. abc's strategy is different, and the makeup of the audience is different. if you look at what we did last year in prime time, we have the number one drama in grey's anatomy, we have the number one new drama in once upon a time, we have the number one scripted and number one comedy on television with modern family. so that is a very strong base for us to build a new schedule for the '12-'13 season. >> any of the new shows you're particularly excited about? >> i'm excited about all of them because we're at that wonderful moment in the year where everything is possible, everything looks great, and everything's going to be a hit. [laughter] and i just want to stay there for a couple more minutes. [laughter] but i think someover -- not only the news show, but some of the scheduling moves we made were smart. i think revenge, which was the most-buzzed-about drama of the year produced by the abc studios moving to the desperate housewives time slot was a very, very smart move. >> broadcast generates all the excitement, the big shows that the network lines up, but viewership for those as a group is going down, right? we've seen broadcast viewership drop pretty sharply in the last year. >> well, it depends on how you define broadcast viewership. we look at viewership very broadly, and one of the things geri talked about in her presentation was looking at it across all screens. and we've been looking at it with nielsen to make sure we have an accurate measurement. we've moved from one kind of, one way of measuring television into c3, we actually have some advertisers who are working in c7 with us, but we have to add abc.com numbers to that, we have to add mobile because that's where our app is offered as well. we have settop box, vod. >> so you're not concerned about the fact that traditional broadcast viewership is on the down trend? >> no, because i think we as the walt disney company see television holistically. we have a number of content engines just in our division alone, and we also have espn and, of course, we have the movie studio. but within our division, you know, if you look at the disney channel portfolio, disney jr., if you look at abc and the great work of abc studios, if you look at abc family, we are producing a tremendous amount of scripted and unscripted material that is seen on a variety of screens. so i actually see a very bright future. >> so that was really, i mean, one of the reasons why i was eager to get you here for this conversation, you have been very aggressive about pushing into other screens and other platforms, pushing on to digital and internet platforms. but it's a bit of a jump into the dark, isn't it? i mean, you're not making a lot of money on -- obviously, cable is making a lot of money, but beyond cable, you're not making a lot of money on any of those platforms? >> you have to remember in the early days of technology, remember when television came out and everyone says who will want it? everyone loved their radios, everyone loved to go to the movie theaters. they didn't think there was any other kind of entertainment that really needed to happen, and then television happened. it didn't kill radio, and it didn't kill movies. everyone figured out who they were in this new world or order. so change has always been part of our industry, you know, just on the technology side moving to color tv, moving to hd, plasma, i mean, look at all of the different ways we're watching just on the set at home and then adding all of the other screens to it. you know, it's evolve or die. and i think what digital gave us, and for our company it was that phone call from steve jobs to bob iger, and then bob calling me and saying steve wants to talk to you about something. and that was, actually, the video ipod which when you think back, i remember the video ipod, but i'm so addicted to my iphone, and i've got everything there now that it just seems a very natural progression. so -- >> is that a good business for you? >> yes, it is a good business for us. because it connects us to our viewers in a way we never dreamed possible. >> you don't make the kind of profits there with your content that you would make on your cable channels. >> no. they're very different business models. one is 30 years old, and the other is a few years old. so i think they're apples and oranges. >> one thing that happens, once people start consuming video that they're pulling down digitally over the internet, then all of a sudden you go from a limited group of competitors to an unlimited group of competitors. you've got the jay-z channel, the deepak chopra channel, "the wall street journal" channel, there's infinite competition out there. doesn't that effect the value of what you're doing? >> no, because -- for two reasons. number one, we've always had a lot of competition. we've always competed with people's leisure time activities, we've competed with video games, we have competed with, you know, not just other television channels or television shows. and quite frankly, i love competition. i think it's the healthiest thing for our industry is to have, you know, other people doing great work out there. but i think what you really have to pay attention to in this new digital world, and i think what will set us apart from everyone else are the brands that we have at the walt disney company. and it's disney, it is abc, it is espn, it is marvel. you know, we have a tremendous amount of strength in those brands. those brands are meaningful. and if you -- whether so they can -- >> so they can withstand limited competition? >> as long as we keep them relevant. because my very simple definition of a brand is the relationship you have with your consumer x. that relationship -- and that relationship has to be as important, as relevant and as current as the relationship you have with your family and your friends. >> because another piece of this new world when you move out onto multiple platform bees, the notion of a channel is very likely to change, right? >> yes. >> and that's okay? >> well, it's already changed. >> yeah. >> but what we've learned, we do a tremendous amount of research in the company. the research isn't do you like this show or that show. anyone can do that. the research is really more along the lines of what's going on in your life, you know, what kind of entertainment are you experiencing and how. and one of the things that we've learned is that we know disney is a brand. we know and understand that, and we have brand equity studies that we do every year. couple of years ago we threw abc into this mix. and what we discovered was that there were, actually, two television brands that popped for people; unaided recall of abc shows was higher than unaided recall of, you know, some movies to movie studios. people really knew and understood what an abc show was x. if you looked at, if you just heard paul lee's speech at the up front, paul actually started to touch on that. paul actually started to speak to the abc brand and what it meant to people. >> how much of that is disney? >> in abc? >> yeah. >> you know, it's interesting, i think disney and abc share a true quality. they are defined by quality, i think they are defined by the stories that they tell. they tell extremely good stories, very well written, highly developed characters. i think even, you know, that's talking about entertainment, but when i look at abc news, i see many of the same similarities. i see great journalism which is great storytelling. i see tremendous anchors who deliver this information in a way that is relevant and important to the american people. so i think that that is the distinguishing characteristic, and i think that is what will continue to set us apart. >> so we talked about declining broadcast viewership, but you, you nodded to this, the video viewership overall seems to be going up. >> video viewership is going up. >> we're now talking about people spending an average of five hours a day watching video? >> uh-huh. >> is that a good thing? >> as long as it's our video, i'm happy. [laughter] >> there's nothing else human beings do other than sleep that much every day. >> but did you also know that the most-tweeted topic last year worldwide was television? people talked about television, they tweeted about television more than they tweeted about any other subject. >> so you're saying it's not completely passive. >> no, it's not completely passive. and i think that is something to think about in the future, and that's actually what a lot of this new technology gives us. you know, whether you're tweeting or blogging or posting or pinning or whatever you're doing, you're talking, you're interacting with your community about our television content. and i think that is something that we were missing when we were just a flat screen at home. >> so much more interactive, much -- can you give us some examples of some interactivity that you're woing into your television? >> well, one of the things that we've been doing last number of seasons with dancing with the stars is voting. now, it seems like a very simple idea, you're, you know, you can text, you can vote at abc.com, but what actually has happened is communities of people if you go to facebook and look at the "dancing with the stars" community, what we've realized is these very simple first steps that were relatively easy to take have actually spurred larger community involvement in our shows. >> they're also disagreeing with the judges on "dancing with the stars." >> yes, they are. especially len. >> can you tell us who's going to win? >> no, because i don't know. i wish i knew. [laughter] >> talk about the comcast deal because that was a pretty extraordinary agreement. tell us why you did it and what you hope to get out of that and whether you're going to be doing more deals like that. >> well, to answer your last question first, yes. because i believe the comcast deal was to -- it expanded the scope of our industry, it expanded our opportunities, and i think the most important piece of it was that both comcast and the walt disney company realized how fast, how nimble and how available we needed to be to our viewers, to our customers. and that was baked into the comcast deal in many different ways. now, espn had gone first with time warner with watch e, pn -- >> watch anywhere on any -- as long as you awe they want candidate you are a subscriber to time warner cable. >> that's correct. and that's something espn did with comcast as well, but it was the first time that the disney/abc television group did that. and we will be launching our disney channel suite of services as watch disney xd and watch disney jr. next month. and it's very, very exciting. we did a beta a number of months ago, as you can imagine, this just created such excitement inside of disney, that we created a beta, and i sat down with brian roberts to show him what it would look like. and you'll see a live streaming disney channel. you'll have video on demand content, and you'll have other things in the mix as well. and it really, i do have bill baker to thank for signing that initial contract for disney channel because i think what you brought to the world was something very big. and when we signed that comcast contract, i realized the great step that we were taking with this great brand of disney channel. it was really bringing it just that much closer. we did research, and we actually videotaped the research so, you know, we would have a chance to really see the way kids and parents were talking about this app. and we had a moment where a mom was sitting next to her daughter, and the researcher said, well, you know, tell me about you've just been watching disney jr., and tell me about, you know, what you're doing. and she said what i'm doing, i'm watching my show, and i can see myself curled up on the couch with my ipad. and i thought when were we ever going to hear that you were going to curl up on the couch with your ipad. but it was, another bell went off which was people need to be able to take us with them. >> and you're completely indifferent to what screen they watch you on. >> i am pretty imp different. -- indifferent. because i realize that our audience is going to watch on the available screen. there will be properties, my great prediction -- let it shine is a great movie that we have coming out soon on disney channel, and i believe that's going to be one of those big screen experiences like high school music call was or for people. but i also believe no one will want to miss it, and you'll be able to see it on your ipad or your phone. >> and as people, a lot of that, of course, is on demand. i don't know, do you have statistics on how much of your viewing now is on demand versus live for -- >> low double digits is on demand, but it's, again, this is a business that is continuing to grow, and it's going to be very interesting to look at the difference between kids using on demand and adults using on demand. >> kids seem to be using it more. >> kids continue to use it more, and it was very interesting. i remember doing focus groups a couple of years ago and watching the moderator in the room ask the kids questions about what they were doing, just lifestyle questions. and the kids were talking with their hands, and they were doing a lot of this. and that. and we realized, and when we got the question in the room, what does this mean and what does that mean, it was like, oh, when i'm in carpool, my mom hands her iphone back to me. and then we started hearing stories about parents who had just gotten their first ipad, and it went missing because their kids had it. so, you know, we're live anything a world now of kids -- living in a world now of kids that's very different than when i started at disney channel. we're living in a world of touch screen. >> there's a video, a youtube video of a 1-year-old baby playing with a magazine and going like this on the pages of a magazine, and the caption says this magazine doesn't work. [laughter] now, nickelodeon said recently that the kids' interests in video on demand was actually hurting them in some ways. they were seeing people migrate to netflix where you have subscription video on demand. are you seeing that at all? i mean, is disney, are the disney channels, for instance, prepared for a big move to the video on demand? >> well, actually, we've been on netflix, actually, we've seen our ratings go up. in fact, nickelodeon -- or disney channel beatnik load onwith 6-14-year-olds and broke their streak, and it's remained -- >> so you're not threatened by anybody. >> no, no, no. [laughter] >> we're all just friends. [laughter] >> it's the happiest place on earth, what do you want me to do? [laughter] no, actually, netflix was a great opportunity for us. and you have to remember that with our disney channel and our abc series, they do go on at the end of the season. we do have a couple of exceptions, we have fin whereas and fresh and secret life of the american teenager that start -- >> but, so what in this rapidly-changing world scares you? what causes you to wake up in the middle of the night and say, oh, my god, we better be prepared for that one. >> i think it's what we don't know yet. and i think one of the things that i preach constantly at work and be, sadly, even at home is paying attention to what's going on. and always thinking about, we have an unofficial mantra in our group that we say to each other, we create what's next. so it is being that half step or maybe full step ahead of the audience and having that -- when the ipad came out. we went to the presentation, saw it, went back to the office and in our staff meeting we asked the question, if you could do anything with that device, what would you do? and everyone went away and thought about it and came back, and the first thing that came up -- there were two things that came up. we would do an app for abc news, and we would do abc.com. which we had established as abc.com, but we would create that app. and the goal abc.com went first, abc news followed, but the goal was to be ready for launch day. and a very interesting thing happened. we were ready, but you never really know how many bugs you have in an app until you're out there. so our very smart digital team decided to monitor people testing out our app on twitter. and we actually established probably our first customer service department. because as people were racing to the apple store, buying their ipad and then seeing what was available, abc.com came up, and we started to monitor the twitter feeds, and we started to hear about the bugs. so we actually started to communicate with people on twitter, and what came back to us was i just heard from abc, and they heard that i had a problem, and they're going to fix it, and at 4:00 they're going to release a new version. and, you know, it was a very, very interesting process for us. and, you know, it's also important to note that that abc.com app is the sixth most-downloaded free ipad app of all time. >> and how's the relationship overall with apple? i should say i ask that partly because we went through the same sort of experience, you know, had an app out there at the launch, it's been quickly adopted, very popular. but the relationship with apple is far from perfect. >> really? >> yeah. [laughter] you want me -- but i don't want to turn this interview around. >> no, we can talk about that. >> we'll get to that later. but, i mean, how do you feel your relationship with apple has been? >> you know, i think it is strong and productive because we're providing important products. and i think the beginning of that was really supplying our shows to itunes and taking, as you mentioned earlier, that great leap into the unknown. you know, we didn't know that it would work, but we had a very strong feeling that it was a good thing to do because we believed in this device. we saw the device, we saw how they were going to manage the itunes store. we had a criteria developed of the people that we would want to work with. not companies by name, but, you know, who companies had to be in this new space. they had to have integrity, they had to be very connected to their consumers. they had to be high quality, they had to protect us from piracy, and apple did all of that. >> where does this, where does this go? how much of viewership is going to be on mobile devices five years from now or ten years from now? >> you know, i would say in ten years from now when it's being driven by, you know, the, you know, millennials, you know, i always believe if you need to know something, you should ask a 9-year-old because they are the most proficient at all new technologies. so when they hit that millennial stage of their lives, you know, when they're somewhere in that 18-24 range, i think a lot of video viewing will be on digital devices. but i don't think all of it will leave television. i think television -- because televisions have become so much better and so much bigger and, you know, are, you know, really a movie experience in a lot of homes. i do believe that they will play a role, but i think what will become critically important for us is that we have absolutely the best measurement of all of these devices so we can monetize our content. >> let's talk about your global business and particularly disney. i mean, disney has become a truly global brand, right? >> it has. we have 103 disney channel in 167 countries. and that has happened -- >> can you name them allsome? >> yes, i can. [laughter] some days. but that's happened in a very short space of time which i think really speaks to the power of the brand. i was in russia in march. we launched a disney channel there in january. and it's also a model that we do use for disney channel in turkey, in russia and in spain. and very different from the cable business that we have in the u.s. but i -- >> the advertising markets support that -- >> yes, they do. they do. but it was very interesting, i asked our country manager if she would take me into a classroom because i wanted to meet our new, our new disney channel viewers. and i went in. now, we had only been on the air for less than 90 days. and i started out, i was very curious about who they were and what stories were important to them, and i wanted to know what their favorite lull buy was, what were their sleeping songs? be and we eventually got around to stories on television, and 25% of the kids named finneas and ferb as their favorite television show. it's resonating, that's a very important fact for us. >> and those 167 countries, they're watching the same content? >> yes. well, there is a lot of local production. depending on when the disney channel launched in the country, we do have a lot of original production which makes you feel that this is your disney channel, this is not an american export. >> and so how much of your revenues now come from outside the united states? >> that is a very healthy business for us. we don't split out domestic from international, but -- >> [inaudible] >> really healthy. [laughter] >> very rough. very rough. univision, interesting deal with univision. >> yes. >> to attract domestic hispanic audiences with english-language content. >> exactly. >> so can you give us a little texture how that's going to work? >> first of all, thank you to ben sherwood for bringing this partnership to us. >> you have a lot of reinforcements here. >> i really do. [laughter] .. >> the beauty of the partnership is that neighboring a deep and embedded knowledge of the audience. they bring tremendous information to our company, and to the news division. and i believe that they will be a great partner in the creation of programming and the creation of relevant important programming for this audience. >> so you started this discussion by mentioning good morning america, the today show has dominated that top place for a long time. you have said that couple of times. doesn't matter how important is that to your business? >> is really important. [laughter] >> i have to tip my hat to the gma team in all of news, this is bigger than a labor of love. gma is a trip that show. it does belong in the number one spot. i have long believed that good morning america opens the day for the television network. and it's a very dynamic show. the news is strong, and all of the information that great team provides to the american public i think is critical. and i think they have earned that spot. >> do you think they will keep it? >> ben? yes. yes, they will. >> can you talk about the economics of the morning show? it's important symbolically but also economically. >> it is important economically. there is a good, there are very healthy batches for morning television, and we have certainly enjoyed even if the number two position we have been the beneficiaries of this budget but there is money to be made in the morning. >> are your demographics in the morning different than today show demographics? do get a different kind of person? >> no, i believe our -- more female than nbc does. but i say the demographics are probably comparable in the morning. >> news, you mentioned news on good morning america. you talk about news, the important news earlier. but abc doesn't have a cable news channel like cnn the way nbc does. doesn't matter? to have a strong presence in news without real-time cable news network? >> actually i believe you can, and i believe that we do. you know, we have had discussion, we do have a small cable network called abc news now that it's been out for a couple years now. every -- i replayed as i watch our digital world if all, as i watch people turn to their ipads and the iphones, i do believe in some ways that it was a step that we missed, but we didn't miss a step. meaning that because of the devices that we now have access to, because of the construct of our news division, and i look at what we've done with our partnership with yahoo!, and the tremendous growth that we have experience with abc.com. when i look at the upcoming joint venture with univision, i feel that we are very well positioned without having a 20 a 24 hour cable news network. >> so no need to go back and revisit that? >> no. i believe our future is very different, and i'm very happy about it. >> so jerry baker mentions at the beginning the story we had, the highlight, got a picture come he was one of the 10 women likely to become ceos. at disney or someplace else. is that what you, and i should also point out, i think is the first person has been of the stage for a few points of reference, any business position who has been a co. so we're delighted to have you. is that something you want? is that what you aspire to? where do you see your career going? >> i've never aspired to a title, ever. i have always, i really charted my career based on what i was curious about. i started at nickelodeon because i was really curious about the idea that you could have 24 hours of kids programming. what was a channel devoted to get, what would that mean? i went to fox to launch effects because i'd never launched a cable network from scratch without an infrastructure wild west, get on your horse and go launch it. and i went to disney because, grow up in nickelodeon, you're insanely curious about how does he do? i thought that must be a book somewhere someone will tell you, this is how they do it, this is how they launched those movies. this is how they built those parks. so i had a great curiosity about the walt disney company. that's really what guided me. and that will guide my next step. but i have to tell you where i am right now, i think is the most exciting place on earth. i look at what we've done over the last 16 years that i've been with the company, and really especially the last five years, have just been probably the most exciting and the most fulfilling years of my career. >> part of the reason i ask the question in part of the reason we did a story is if you look at the ranks of fortune 500 ceos, i believe right now there are 18 who are women. amazingly small number. why, as someone who is on your way up the ranks, why do you think that is? >> i don't know. i don't know. you know, i do think there should be more women because i know many talented women in our industry. that he is here today. reader is here. diane sawyer. we can point to so many women that we know who have achieved great things. >> have you felt a bit more difficult for you as well? >> you know what? it sounds funny but i think of myself as a person, and i believe that, i believe that i am -- i believe that i judged on every single day on what i bring to the table. i'm judged on my successes. i'm judged on my feet but i'm judged on innovation. i'm judged by how i got this great division for the wall disney company. i don't think about it along gender lines but i think about it it is about performance. so there are a lot of women out there who are delivering great performance. >> this isn't always a very easy august if you have lots of questions why do we go ahead and open it up. [inaudible] >> hang on a second for the microphone, and please introduce yourself. >> hi. john. you talk a lot about the transition to tap into kenny speak a little bit about the degree to which measurement of your eyeballs of yours is keeping up? in the world today where we'll see a little tiny company price with a bigger market cap than the entire walt disney company is all about, you know, people looking at things as everybody moves, and i agree, children live on these devices, is their traditional in which your audience is measured keeping up to allow you to sell your advertising? we have know that everyone is going there. but is measurement stay with you? >> you make a great point because of the measurement is the key to a healthy future. and our ability to monetize this content. we are working very closely with them on a number of projects, to make sure that we capture not only the eyeballs and knowing how many clicks or how many viewers, but to these people are indeed it in a way that obviously respects privacy, but it is, it is key to the future of our business. and i.t. believe that you and i do believe people are awake. i believe they're working on a. i've seen a lot more work coming out spent part of it is one where the eyeballs are. but part of it is can you can in the same of advertising dollars? >> i do believe if you can say to an advertiser this is who i have. i am delivering to you, and income as we do at abc, highly educated very engaged upscale college educated consumers. and those of the consumers that you want for the specific brand launch. you will get them and the dollars will follow. >> how if they're using this new skip -- dish machine biscuits over the the add? >> i'm -- i've only read about and i'm anxious of our technologies get in there and take a look at and see what it actually means. >> question right here. [inaudible] >> next on i will let you do it. other questions? >> allen with abc. if you consider the fact that the viewers who are using that new technologies are younger and younger, do you imagine that sometime within the next, who knows, 10, 20 years it's possible you will ever have to schedule anything in a traditional way and it will all be basically all, all on demand, abc will issue a list base of it and instead of having the up front be delivering the new schedule, it will be basically just a list of shows and how you can get them? isn't possible -- [inaudible] >> that's an era question but it could be 20 years from now. and people using these devices are not necessarily younger and younger. i thought that, too, when the ipod came out. i actually members saying to steve jobs, oh, so this must be a big 12 to 18 year-old market. and he said no. it's everyone who loves music. and i think that the same holds true for the ipad. it's everyone who wants information, everyone who wants to watch entertainment. regardless if you're a kid or a boomer. budget point about the schedule is interesting but i think it's actually a long way off because i think what the schedule does, and as i looked at it and as we're formatting our presentation for the up front this year, i was thinking about how we were laying out the nights and what that meant. and i realized as i saw the nights go up on the big screen for the 20th time, that what we were telegraphing to people was actually very, very important here we were telegraphing when we stack america's funniest home videos and then we go to once upon a time. we are sending you two messages. about how compatible the shows are so that tells you who the audience is, and we're also telegraphing very strongly that this is a abc, and you have expectations about abc, that those two shows we are certainly meeting. so i think that the network schedule will remain very useful for people because truly, everything that we have is on demand right now. everything. and it's on a number of devices. >> there's also a social experience. i know when my kids, my two girls were sorted in their early teens, i knew the one time of the week that i could get my whole family into one place was during american idol. and so it was, so i was rushed on to make sure i was there for american idol because i knew they would be there. and in some ways, the inactivity expense, the facebook experience may reinforce the because people want to talk to the friends or family can while they're watching these shows order. so how powerful is that kind of social experience around a set time? >> it's even more powerful now because as people are experiencing television, and i had this, my god has been awake at college for couple of years -- my daughter has been away at college for couple of years. she was -- so it was so interesting because i would watch the east coast feed at home, and she's been in college on the east coast. and we would come if we weren't on the phone, we were texting each other about it. and i thought, this is just expanded, and people are come we know people are tweeting because we see. we know that their own facebook. we know that this conversation is going on, which makes that show so much bigger than it was before all of this technology existed. >> that's very interesting. a lot of questions. right here. >> cheryl with nielsen. over here. >> go, there you are. >> my question is more about the marketing of the shows now. so as all of this technology changes, how viewers get to the program, how do you think differently about marketing, how much greater is the challenge from the investment, can you talk about that? >> sure. we still start with the essence of the show. we still make sure that we are all able to identify whether she was is about and what its importance is in the schedule. and then are, and who is the audience. and then we start to plot and plan how we launch. some of it is when we launch it. because as we have all seen, the fall turns into clutter fest with everybody has the biggest, the newest, you know, most attracted the most dramatic, the funniest show on television. and part of it is being very strategic about when we launch. and then there's also how we launch, and is this a show that for social media is a very, very important, somewhat important, will become important after the show was launched. we make a determination, and then we work through the marketing plan and determine what is the best venue for reaching intended audience. so it's a very strategic exercise, really no two shows are alike. and we really just have a few new shows are scheduled this fall, which i think is helpful. the you that we launched desperate and lost, it was the fall of '04. we look at our budget and said, yeah, not a lot of money here. we have to be very strategic, and we picked three properties to launch, and they were desperate, lost and -- [inaudible] >> that's not a bad batting average. >> right here. >> you painted a picture of a very fast-moving unpredictable technology environment. i'm wondering, how do you manage them how do you plan to exist and that of other? how do you think about planning? >> r&d i think is at the heart of walt disney company. if you go back to the history of walt and mary, if you look at his work in animation and realize the genius of experimentation and how important it is to invest in r&d, i think that's what our foundation is to the second piece of it is, working with people are as excited about the future as you are, and who are willing to interact and pay attention to the consumer. and that's a very critical piece but every time a new piece of technology has, whether it is the video ipod or the iphone or the ipad, i made sure that my executive, everyone on my executive team had one. and we bring all of these devices into our staff meetings and talk about what can these devices do for the walt disney company? what can these devices do for abc news, abc entertainment, abc daytime, late-night, the disney channel portfolio, abc family. what do you know about your audience? how do they get out in the field, find out. so i actually think all of these pieces are critical to building a business model. and understanding, too, that we are creating with every new device that comes out, we have to reevaluate the business models that we are using. we cannot rely on the past. and believe that will make a successful in the future. we have to stay one step ahead, thinking about how we are measured, thinking about how we use these devices. how these devices are useful to advertisers, and what our role will be. >> right here, and then here. >> anne, i want to ask you a question. my prejudice is devices, social media. they are tools for people to interact. they are not content. i'm a strong believer at the end of the day content is still king. context has shifted somewhat over the last few years between reality type shows, scripted shows, gone back and forth. where do you see the shift happening in the next five years? >> you know, it's a great question, and i don't disagree with you. i think social media in large part for us right now is a very important tool. on the content side, i think it's really dependent on the mood of the nation. and one of the things that paul has spoken about both flash and bitchy and the up front is being responsive. now, during a recession, after a crash, we looked back at the shows, the movies that were popular in the '30s. we looked at the shows that were popular in the '70s. and that informed a couple choices for us last year. that informed the choice for revenge. does a very satisfying show for people. [laughter] and also once upon a time, which was an escape to fantasy, but with a good dose of reality and drama inside of it. and one of the things that paul is launching this fall as they drama -- >> a creepy new york show. >> yes, sir this. not too far from here. and i would say that building will become one of the characters. >> there is a real 666? >> i don't live there is a real 666. there could be. any new yorker is welcome to correct me. but that was together these we found out is that monsters and scary things worked very well spent and what better place than new york's? >> there you go. we love new york. [laughter] >> john rose. boston consulting group i want to go back to the question that alan was asking early on around competition, the proliferation of entertainment opportunities, and implications. and take it a little bit away from the walt disney company and abc specifically, because you have an extra in a set of assets. you're making a wonderful set of moves. but there's an alternative to the narrative that says to me, when television came up everybody thought it was the death of everything else. i think we've seen in the recent years a different dynamic, the record industry has lost most of its economic value, and that is going to newspapers and moving to magazines. starting to move into radio. as you look at slow gdp growth of the united states relatively fixed, and to limit how much consumers will pay for stuff. so if you leave the walt disney company and abc on loan for second and look more broadly just at the video, the television industry, studious, the networks, the tv station, it's hard not to imagine that someone in that you chain loses. because there's not an infinite amount of money either on the outside or on the consumer pay site, and wichita to clos, which i've been doing a lot recently, they are fundamentally shifting their media mix. the advertising and marketing mix. specs of the question is who loses? >> yeah, i think the people who lose are the people who do not understand their consumers and are not paying attention to them. people who do not have strong brand or if they have a strong brand, they are not continuing to build it. they are not continuing to expand it. you know, i think we have seen it throughout the history of business. fondly remembered, oh, yes, they have that product. what did he do after that? they didn't do anything. they got stuck. >> but those are individual companies. tv stations for example, don't generate -- >> pieces of the chain. >> are there pieces of the change structurally at risk, as opposed to companies individually? >> none that i can name. and i wouldn't say tv stations because the stations, we'll know the relationship between the tv station and the network, of course, but the tv stations connection with their audience is incredibly deep and very, very import, and placed into the success of the network are i can say because we ate station. seven of them were number one in the last rating kerry. that speaks volumes to the effort that is made. but as far as your question, i don't have an answer. i don't know who -- >> cable is a hugely profitable business at the moment but does it go away at some point? every tv that best buy sells now is internet-enabled. does the internet become the delivery pipeline eventually? >> i think a strong cable brands, and certainly our government has been platform agnostic. so i think that the brands really will roll with the technologies that are out there. as long as they are good business models for them. >> other questions? [inaudible] >> right here and then here. >> hello. i would like him kissing about how d.c. relationship with immediate agencies? i represent in the agency. how we can work together better? how do you see a relationship growing? >> i think the big idea for us is that we should be together at the forefront of reinventing advertising. i think we should be thinking in very big and very bold and very scary ways about what advertising will look like 10 years from now, what would it look like on an ipad? what should it look like on a mobile phone? what will it look like a television? what would it look like on a device that hasn't even been created yet? i think we all need to move beyond, we've done a lot of great things together. we've done integrations that, you know, dazzle people. we have done 15th and '30s and '60s, in two-minute trailers. but i think there is a whole new chapter to be written, and i think needs to be written together. so i think -- >> is there a campaign you can point to that has been across devices or channels that sort of shown the path toward? >> i think i start to see some glimmers of it in the work that we did on the oscars this year. this is working with the motion picture academy, and making sure that we're getting the word out. but we started get a little experimental about how we brought that message to the different devices. a great example because it's not a major advertiser, but we are having conversations right now with agencies and clients, and trying to figure out the way forward. that is different than the way we are doing it right now. >> hi, anne. so, i guess i'm really curious about the univision abc collaboration, and anything about it you bring together to news organizations that have incredible kind of history's. but you think about abc news are more traditional news has been oriented towards domestic politics, domestic issues, the west, maybe the war on terror has been big issue. univision really did make immigration between a big topic they're probably -- so when you're thinking about the news service that is targeting english-speaking, you know, latinos, what is the new school to? what will we see differently than what we can see from what we've seen on -- >> i don't know that i would call it a filter and i don't think i would characterize abc news as a domestic organization. i feel like i've traveled the world with diane sawyer, and there really isn't an important story in any country that we haven't not just covered, but we eventually physically been there. so i think that we bring that great journalism. i think we bring that world into the univision partnership. your point on immigration is a good one because i think it really speaks to the strength of univision. and what i was saying earlier about univision knows this audience better than anyone else, and that's why we want to partner with univision. we want to reach this young, fast-growing demographic. and we want to reach them with abc news, with univision news, with this information and lifestyle programming that is important except that's what we are relying on. so if that's what you're called a filter, maybe it's more of the criteria. we will determine together what we both bring to the party and how that's assembled, whether it's on a mobile device or certainly on a channel next year. >> other questions? >> did you get breakfast? >> i just want to follow up on the other question. what you think the likelihood is that this goes ahead with it, and if they do, what is the industry's response? do facilities increase dramatically on dish? what do you do ask it's an important part of your ma. >> well, i don't know what dish is ultimately going to do with the. wicket from them but as i said earlier we asked senate our technology people to fully understand what the hopper technology is about. we have read honestly very little. we've seen a lot of reaction. obviously, you know, our advertisers are extremely important to us, and many networks, not just this week, but weeks before us have spent a lot of time working with our advertisers talking about the opportunities that exist for the two of us with the fall season coming up. so jessica, i honestly believe it is a tv thing. i think we need to do more. are they going to charge more? is a free? how is a packaged into the current offer? and ultimately, where is dish going? what is that business going forward, and how does this piece fit in? >> at we can take a couple more questions. here and then here. >> hi. that pasha, a new york observer. i was curious what you thought, would you think of area of startups backed up by areas that let you live stream broadcast tv to any mobile device. >> yeah, i read about that, too. [laughter] we really don't have any comment on that at the moment. >> have you seen that technology? >> i have seen the technology. i have only read about it. >> bob friedman from radical media. clearly, the cable industry is very robust but there's an ina that you are really 50 cable networks that matter today. and the irony is that they are in 80 million homes but in the early '80s when they're all developing developing smart cable networks, they were very, very targeted. back to the question that john was asking. is there a media -- having a copy like dizzy respond, what youtube is doing, is the new youtube channel really the new cable channels, i hate to say this, to data cells, but 30 years ago? what did they companies do what they just take advantage of the 80 million homes they have and they're very robust cable rolls back i think it's going to boil down to how important they are to consumers. i mean, do they have must see, must have program on the air? are people going to go to them five times a day because they have to see it? again, it really always comes back to quality. it comes back to relevance. it comes back to is this something that's really important to your life. the jimmy kimmel show, absolutely very important in my life. but i don't think that every channel survive. i think we saw 30 years ago with cable, there were so many startups. we remember our ctv. we remember the entertainment channel. we remember the merger of -- that became lifetime. we had a lot of french left mtv networks to go to startups that ended up petering out or merging into something else. >> one last question. right over here. >> margot, author of shackleton's way. anne, i'm your basic nightmare and that i refuse to own a television set today. and i clear in understanding that all of your programming is moving to online so i can watch it on my comp your? >> actually we have been online since the fall of '06, which was when we launched abc.com. and we actually did that very thoughtful. we launched the data within of our affiliates and 10 of our advertisers in the spring of '06, and determined after 60 days that we were onto something, and it looked good. and that has continued to evolve. that site has changed. certainly a lot over the last six years, and now it is offered on mobile phones and it's an app that you can download to your ipad as well. and your abc news is available as well. >> i'm going to give the final word to our sponsors here, john roll's, but before do that just a couple of quick reminders. you can see video clips of this, and you should be able to later see the whole video on the viewpoint website. we're back your june 12 with carlos, the next breakfast. john? >> i just wanted to thank anne for joining us today. alan for running as usually does a spectacular dialogue. our cosponsors for orchestrating this. and as al pointed out, will be here in a few weeks with another great discussion. and will be ending the show with -- [inaudible] so that should be -- >> for a response. [laughter] >> and will play the appropriate clips. [laughter] as we wanted him to the chair. so thank you all for coming, and for participating. [applause] [inaudible conversations] >> we have more about telecommunications indeed the innovation coming up this weekend. issues national cable and telecommute haitian convention will bring you panels on the feature film and music distribution with the ceo of comcast, rising, wireless and thibault. the founder and chairman of dish network, charles ergen. he talk resort about his career and the future of broadband at the university of colorado law school in boulder. for a professional blackjack player, started echostar communications 30 years ago by going door-to-door in colorado. he launched dish network in 1996, which is the second largest u.s. satellite broadcaster currently in more than 14 million homes. [inaudible] reportedly your dad take you to see outside and on day to see sputnik in the sky. i assume if that's true it's the first satellite you sell. talk a little bit about growing up there and what effect if any that had on your future. >> well, first of all thank you very much for having me. it's my pleasure to be here. certainly grown up in a relatively small town, a count of 30,000 but it was unique in american history and it was one of the three places that really focused on atomic energy and the nuclear bomb and was started the processing uranium for the first atomic bomb in the middle kind of nowhere. and part of the biggest thing i got out of related business i got out of, i grew up around a lot of really smart people. so all the kids parents were ph.d and scientists working on nuclear energy. around the world, so i realize early on there was a big world out there, and these people were really smart and i got a bad end of the gene pool. a lot of these people in school were really, really smart. i think we're 26 national merit finalists or, in my class but i certainly wasn't one of them. but i recognize that there are people that are really, really smart and can do things that other people can't do. so i had a good sense of that, as i got older and as i got in the business. >> you had an unconventional business background, among other points, involved you playing blackjack professionally in vegas so will your band. -- so well, you were banned. a lot of people talk about how playing blackjack displayed a business goes. bill gates, many people said his poker skills was part of his business acumen. is there something there in terms of cardplaying skills and success of business? >> i think is a pretty good foundation. i think it's just like, very similar to those of you who are getting your undergraduate or graduate degree here. it's a good foundation for things. i would take it farther than that. first of all, the stories about me our prefix accurate. my partner was a much better blackjack player than i was, and he looked pretty shady. so he got take out a lot more than i did. there was a couple of years when i retired, i was looking for a business to start when i was 25, and i spent really two years, i played a lot of poker, i put a lot of backcheck and backend to each of those, each of those was a different discipline. in the sense that blackjack is very scientific. so there's always a right answer in a wrong answer, to take a card or increase your bid or bet big or bet small is absolute right and wrong inspectors never made pesto, never cheat, i lost four times in row. i will win the fifth time. there's never, you know, it's your money or we can the. it's very, very disciplined. poker on the other hand is a game we don't have got the best than to win. and that's, poker is really reading of the people and reading human emotions, which certain comes to play in business. and backgammon, while is a big part of backgammon over a period of time, the real key to backgammon is to be able to thank many, many moves ahead. so most people when they played backgammon, a move the dice, but if you really get good at it you think about what are the odds on the next two or three or four rolls, and what are the two of three balls your opponent might have. sometimes you take a long-term view. user to put yourself in a position that you will does initially, only with the thought that maybe that will go away in the long run. so those three, two years i get a lot of that was a good foundation as i got into business, i was ready well prepared for many of the fun times that we had, going forward. >> what was your best game? >> i really wasn't very good at any of them. but i was probably better at blackjack. >> we will transition from that, what was that goes here, circa 1980 come and nature partner, jim difranco, and now wife, candy, do you start the business with. you are selling c. band satellite off the back of the truck in rural colorado. talk about the early days getting the company started. where did the inspiration come from? >> the inspiration actually came because the scientific community i got up income and my dad did take now, i'd go watch sputnik when it first came across the skies. i think a lot of my generation did. it would come by every "60 minutes" or whatever it was. i studied when i was retired, i was in the stock market with the limited funds i had to wonder the things i was looking at was satellite communications from a data and voice perspective. because it was so much more economical to do that over oceans and so forth. when jim difranco call me up and have you seen this, i so saw a satellite dish on the side of the road, and the guy was in a band watching football games. well, that just struck me as may be a business that might make some sense. as i know a lot of people having played a lot of poker, at least bet a lot of money of the balkans, i thought maybe want to watch the football games. so that was the early edition of the nfl season ticket. except all those games were free. so that was kind of the intriguing part of the visitor i think ultimately the thing that intrigued me most about the business was not the business itself but the fact that i did not anything about the business and neither did anybody else. it really wasn't the infancy of big dish satellite business. there was maybe one or 2000 satellite dishes, consumer satellite dishes in the entire united states at that time. and so there really was no place to market. i felt like i could start, we could start at the beginning, starting gate and depend on our efforts, our ability to we could go assess in wales could go. that was different from expand. i worked for frito-lay, a division of pepsi, and they didn't need me. there were people there that been the 20, 30 years and knew a lot more about making potato chips and i was ever going to know. they didn't need me to tell them how to make potato chips or how to make money. if they want to make money, just raise prices. they did need a financial analyst to say that. i thought people would stand in line to buy these things. didn't quite turn out that way initially, but that was the thought. [inaudible] it was a fairly successful business. did you think at some point okay, someone is may be willing to buy the business, willing to take the money and run? did you ever think about selling out at that point? >> i think when i started the business, like many onto printers, i think at least my goal was to make a million dollars, which was actually a lot of money back in 1980, by the way. and it was a time i think, three or four years into it where i had a million dollars in a bank and at that point it was like, okay, that's not really that cool. so never really thought -- the passion, we got pretty good at it and to get good at something a lot of times you get passionate about. we got passionate. that's when we first started come a range of dining david drucker was in the audience here, and he started talking of the fact that you can launch satellites and actually did, could make the dish small. he was one our first customers. he worked for united cable at the time, when it was united cable, right? and he started talking about how to make the dish smaller. there was a nasa satellite that actually had a payload on. bathroom started thinking about why don't we do that. just kind of one thing led to another. >> you mentioned the passion quickly became more important than the money. [inaudible] many of which revolves around true entrepreneurs who are building a company, then starting a new one. what was it about building a company that made you want to stay with it, as opposed to hitting the reset button? >> so as you get passionate a struggling sunday, you actually, it was a lot of fun and i love working with people. i also love working with people outside the company, and there were a lot of, anything from ph.d's to hobbyists, the creativity was amazing because we're starting a new industry, and the creativity of how you would make this dish work and in how you would make this dish track the satellites and how you might make the polarity change. always people who came up with this was pretty impressive. there was a day when we got offered $100 billion to buy the company, and that wasn't, that was probably five or six years into, maybe $100 million it was like just why? what would you do with the money? because then you would just go out, probably like win the lottery but i think as people who win the lottery, at the end of the day it's probably not that fun. because most of the time you spend your life with people asking you for money. >> a sad reality, there's some studies on lottery winners and you are right. people end up sad winning the lottery. >> survey i've seen people, years of soul do business, and they usually come usually goes in a couple stages but at first they're very happy and they start playing golf for about six months and then how you doing playing golf? and the problems, the golf never gets that excited about six months, i've been playing some golf. and then if they are married the wife does not want them at home. because she knows she rules the roost, and somehow you're telling me, can kenya medical home and tell your wife out to do the dishes or where to put this, or why she's not looking nice today, go to work or whatever, or the kids need to be picked up our whatever you're doing. she already knows all that. so she doesn't need you to tell her what to do. [inaudible] spent actually it's his life that told me that. laughing she said please, get him busy. and then they get bored, and actually say, a lot of people who sold the business, they really get bored and aborted is really, really bad. they want to get back into it again. >> if everybody gets bored, i don't want to get bored. >> that was not a problem. the 1990, you make a hard move to putting satellites up in the sky and towards direct broadcast via television. you raise 337 million in junk bonds. talk about the capital intensity at that time, and were there any other options, and would you raise money through junk bonds against? >> well, we reached a point where, because all the things david talked about and we learned about those things, the fact was that we in the business we knew was going to become obsolete. and so we decided that we try to launch our own satellites. and realized that that was risky, but we knew doing nothing was even riskier. so that they can a fairly, became the logical conclusion, it was less risky to take a risk. so we went about trying to figure out how to do it. there were a lot of obstacles. money being one of the biggest ones, which it actually costs money to build satellites, it costs money to launch them. then, of course, you had to run a business. so we made quite a bit of money. by that time would probably come and we've never spent any money. we hadn't bought a plane or yacht or a new house the we really say dollar money. so we had 100, maybe 100 something million dollars but i try to school whole a bit of that away. they said you have to put all your money and. sweep it all the money back in to the business, and -- >> you are all in spent i was all in. but i learned that from playing blackjack. if the odds are in your fifth, you go all in. the odds were in our favor so we went all in. we found somebody on wall street, after knockout a lot of doors, we found somebody. after i made the presentation, the guy said i was born to raise money for you. i had been turned down, at the time i had been turned down by 28 firms on wall street to raise money because they look, they said let me get this straight. you're going to go launches and satellites, go compete against tci and at&t, comcast and directv's, general motors is going to be there, two years, two and a half years before you are, and you don't have any money and you never build a satellite before and you will yourself, and build your own receivers angel lodge on the chinese rocket that has less than a 50% chance of success? [laughter] thank you very much, why don't you give me her card and we will call you if we think that make sense. this guy said yeah, i can raise money for you. again, having played poker, i said well, i've got a couple of other guys, jpmorgan is looking at it, you know, at the time lehman brothers. so meanwhile, i was about ready jump out of my skin, of course. and i went back and call them a couple of days later and said i like what you said, we'll give you guys to shut. said that company went and raise billions of dollars for us. it ended up being the best performing high guild at the time, now called high guild because there were warrants. so those equity as well, it became one of the highest performing high yield bonds ever issued. and i would hope that we don't have to do too many more of those that are credit is a little better today. but we would be willing to do that. for sure. >> one thing, maybe what you said and it comes up again, your willingness to cannibalize yourself. [inaudible] the painful reality as most economy firms are locked in their eyes, their perspectives, technology can come along and it's very hard to embrace. that's exactly what you did there, and then again you were willing to be disruptive and by disruptive technology, and not thinking about the wireless. how do you, this goes back again to your card playing wisdom, but how do you have a presence of mind? most of days can't do that unless congress can do that, and they end up like kodak earned me the transition to digital photo, now it's gone, or when computers are would have. they can't make that transition. >> is difficult for a variety of reasons because i think people, i think to some degree you get in a habit of stopping to learn, and so you start doing the same thing over and over and safety in the habit of that, number one to number two is when you become successful, then it's hard to continue to take risk because you could lose. so, you know, what's that song, that song is bob dylan or something -- nothing left to lose. but when you lose, you don't try it. so you have to develop a loved of an attitude -- develop a little bit of an attitude that you have to take a risk. in our case, it is, we are actually doing the same thing again. we're going to do that again because -- >> which were the three times? this was the first time. >> we actually bit me before that. we bet it early on windows a new car that came out in the big dish disappear and new product that we went out and bought, put a purchase order in on a $10 million. we put in place of purchase order for $109. so by -- to buy this book because we thought it was a good product. it turned out it was a good product but it turned out it made us a lot of money, but we were betting something that we didn't have at the time. so we have done it a few times. obviously, launching our satellites was one time. but now we believe that we're kind of a one trick pony as a cover. we did fixed video very well. we do it very economic. with a great product. most everybody who wants a television today has a. there's not a lot to get us information with the recession. so there's not a lot of growth. it's down to a 1% a year, down from two or 3% a year. in fact, there is for major competitors in those markets. so it's really just customers moving back and forth. between customers. for us that's a good business, but 10 years on a that's not going to be a good business. but what will be a good business when you put that together and you put that together with mobile data and mobile voice, and fixed broadband, then you've got a business. so that's what we're trying to transform the company, and we are willing to take, you know, money that we've made so far and risk it again to try to get into that business. >> before, just a few minutes ago, there was some stupid, and alumni and you shared an interesting story that early on before echostar, you had two dishes on the back of your truck, or one on the back of the truck of the times the? two dishes spent and you lose one. it literally goes off the side spent the first day on the job. i was driving. we're going to install one of these big satellite dishes. we had it on a treasure on the back of the car and about 4 a.m., a gust of wind came, flipped the trailer over and broke the dish. so we lost half our inventory. [laughter] so that was my first day on the job. and so, you know, we survive. a, i found out i had a really good partner, jim to franco, because he didn't to me. and we kind of sucked it up and made the best of a bad situation and never to come we understood that we could overcome obstacles. we really never ever had, i guess not that will, never had that big of, never that series of an obstacle since. we've lost several hundreds of millions of dollars, you know, we tried to acquire directv and when a $600 million breakup fee when the government turned that acquisition down. and that was not nearly as painful as turning over a dish back in 1980, i can tell you. >> i was going to say, the day which the chinese rocket picture for satellite up, did you think about that dish going over and what was the sense of emotion during that day? >> i did know. i actually was pretty calm and, of course, i had my whole family with me over in china. we were in the middle of nowhere, it was really just a few of us and some cia agents. excuse me, they were attaches to the air force i think. [laughter] and i was pretty calm. we have done, because we did everything we possibly could do to make that launched successful. and then you have 20 minutes of a controlled explosion that you can do anything about. you just kind of, but i thought we'd done everything we had worked really hard. we have done everything we could possibly do. we had a lot of expertise alan people who helped us to get to that point. i think we're quietly confident that really had two good options. one, that's not what was going to be successful and we were going to be in a business, you know, for a good long time. or number two, it wasn't going to be successful and that's going to go back to being an accountant in alaska. both of them i could live with it i was okay even we. both of them sound like a pretty good deal. but it turned out, it turned out the way it was supposed to. >> so in the '90s, you end up doing what most investment bankers thought was crazy which was competing head-on with cable. tci being the most notable at that time. you had the 1992 cable act to help you out to access program. when you look back at that venture, taking on the cable companies with this new technology, what would be keys to success and what were, looking back, the risks that what could have gone wrong and how did you manage to pull it off? >> i think there were a lot of things that help. one, certainly directv deserves a lot of credit. some other management that helped pave the way. in fact, we were a distributor for directv for the first two years when they started. so a lot of people that paved the way. even prior to that the people who try to enter the business and failed for a variety of reasons, mostly timing. and so i think that, that, i think we were fortunate that the cable industry was arrogant and didn't believe the fact that david and i went, we actually, the first company was actually called -- that we started. we first filed for fcc. united cable -- >> we will lead this program at this point for a brief
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May 21, 2012 8:30am EDT
was an genuine of '09 in the waning days of the chairmanship. that have data from 2006. so we are way overdue for that and i think when congress had one year, they meant an earth year and not a plutonium year. pluto should be a planet by the way. so let's try to get there now. but i think we are a wash and video content. i have three little kids. the oldest is 12. my daughter is 10 and the caboose is five. they don't understand the difference between cable tv or broadcast tv or the internet or something on a mobile device or whatever. speed should there be a regulatory distinction? >> i don't think the. i think the law needs to be updated. i think we need to forget about these stovepipes to say well, if it's collapsed cable, twisted copper phone lines, another. if it's over fiber, another. if it's over the air, in one way, if it's over the air another way. a different set of rules. we need to look at competition laws and concentrations of market power. i think new statutory constructs is based on the. >> host: robert mcdowell is a senior republican on federal communications commission, one of five commissioners to our guest reporters today has been jonathan make, assistant managing editor of communications daily. gentlemen, thank you. >> guest: thank you. >> coming up next, a food policy conference that examines recent legislation to fight obesity and improve nutrition standards in schools. >> from 1971-1973, president richard nixon secretly recorded his phone conversations and meetings. this weekend on c-span radio, hear more of the nixon tapes saturday at 6 p.m. eastern with conversation between the president and director richard helms. and also fbi director j. edgar hoover. >> some people think that now this is active, i have to make a statement about the freedom of the press and that we're trying to censor them and and so forth. my inclination is not to say so. >> you write. >> i kind of think i should stay up to what is your public relationship like? [inaudible] mr. president, you should remain utterly silent about it. >> you would've? >> i would. >> streaming at c-span radio.o radio.org. >> the consumer federation of america host its annual food policy conference in washington, d.c. last week. representatives from the agriculture department and the centers for disease control discuss recent legislation to fight obesity in america and improve nutrition standards in schools. the discussion focused on the healthy hunger-free kids act which increases awareness of nutrition in school lunches. this is a little over an hour. >> good morning. thank you again for being here, the good policy conference recorder moving onto our last session. we have a terrific panel lined up to talk to you about some really key issues on the nutrition obesity front and the administrative efforts on that and can give us an update on where things are and where we are headed. to begin the panel i would like to end it is sally squires, vice president at powell, and she is going to be moderating this panel and introducing our speakers. so, sally? >> good morning, and i hope you're all enjoying this conference as much as i have. we were talking a little bit before this and just saying that this is kind of, for those of us in the nutrition world and food were, this is our conference. there's a lot of different conferences that occur, but it's really a pleasure to be a and c. so many people. so thanks very much. and we have a terrific lineup this morning. in 2009, kevin concannon was nominated by president obama and secretary vilsack, and confirmed by the u.s. senate to serve as undersecretary for food and nutrition and consumer services. at the usda. fnc as has the principal responsibilities and funding authority for the food and nutrition service which feeds one in four americans. it also has responsibilities for promoting healthful diets through the center for nutrition policy and promotion, which as i'm sure everybody in this room knows, is responsible with hhs for the dietary guidelines. our second speaker is dr. william dietz. he is the director of the division of nutrition, physical activity and obesity of the centers for disease control and prevention in atlanta. prior to his appointment as to the cdc he was a professor of pediatrics at the tufts university school of medicine, and director of clinical nutrition at the floating hospital of new england medical center -- unser, the floating hospital of new england medical centers hospitals. and for those of you who have been watching who are either at weight of the nation last week or have been watching hbo, you know he is played a really important role in all of that. so without further ado, i would like, i'd like to introduce kevin concannon. thank you. [applause] >> thank you very much, silly. i think i will stand up so i can see folks over this way more readily. it's a pleasure for me to be here with all of you, and at this conference, but of also added feature to be here with sally and with elites again. we will work together a week or so ago, way to the nation, here in d.c. as well. i'm particularly please have the opportunity to share with you some very important initiatives we're in the midst of at the third nutrition service starting with focus on the healthy hunger-free kids act of 2010. passed just a little more than a year ago. this legislation has provided us with an abundance of new tools to help create healthy lives for our nation's children. we know that nutritious food is critical to meeting the minds, defeating the minds of hungry children. and the importance of our efforts as for the highlighted again this month with the release of the medicine report that said that schools are cute defining obesity in our country. and i mindful as well of a collaborative systematic review that was done about a year ago, finding in other parts of the world of school nutrition programs have many beneficial effects in this space. well, the healthy hunger-free kids act which is championed by first lady michelle obama as part of her let's move campaign has as one of his primary areas of focus the transformation of the total school food environment in order to promote better nutrition and to reduce obesity. this will enable us to make major improvements to school meals, the first major changes by the way involve -- in about 15 years. in january of this year, just one year after the law was passed, record time for federal regulatory processes, if you're familiar with them, we issue the final updated standards for school meals. and those standards built upon recommendations from the institute of medicine, ensure that students are offered both fruits and vegetables every day of the week, that's a first. it increases the offerings of whole grains enriched foods, fat-free or low-fat milk, limits the counterspace on the age of children. this is a first, strike away, in the path of school nutrition requirements had minimum set calories, no maximum calories. strange as that may seem, well now, starting with his july across the country based on age, minimums and maximus. it also increases the focus on reducing trans fats, added sugars and sodium. the standards go into effect in july but many schools are already well underway to meeting those standards. and i was in several in north carolina just this past week. usda is fully committed to providing all the assistance it can to help them 101,000 american schools, public and private, that participate in the national school lunch program. we are committed to provide the kind of assistance to help them to get from where they are today to where they all need to be. well, the changes in the school, and the standards for the school breakfast program, there are 12 million children that have breakfast at school each day, and that number is on the rise, those changes will be phased in over three years to make it easier for schools to comply. but the act also strengthens global wellness policies, as i travel the country i try to meet with state health directors, people trained in public health, to emphasize for them the opportunity to have as public health authorities or health directors to reinforce and to support the efforts in schools to promote health and spirit just a week or so ago we published what many schools across the country have been awaiting the so-called 6-cent rule, many for the first time again starting in october of next year schools will be reimbursed an additional 6 cents per meal over and above the reimbursement rates that have been adjusted for inflation each year, as long as they meet the new meal standards. they are intended to be incentives, and these incentives are the first increases in 30 years in the school lunch program. but a topic that i'm sure many people and your colleagues in this room are interested in our so-called competitive foods, those foods that compete with the standard fare offered in the national school lunch program. we are working on those, equally important, healthy hunger-free kids act rule gave us the authority to set standards for all of the food sold in schools during the school day. including those that are not part of a federally reimbursed new. i know you are especially interested in this. we're very actively working on that right now, and i hope to have the preliminary rule out within the next two weeks or so. some states and many local commuters have already fled the way in establishing these policies pertaining to competitive foods, requiring all foods and beverages served at the school during the school day that will help promote public health and fight obesity. schools are extremely influential in this environment. we know from research done that school-based interventions can have a most positive impact on improving kids diets. community eligibility, another aspect of our school-based programs, we want to make sure that children across the country in fact have access to the school meals program, particularly so during the period of extended challenges we have been living through in the jobs environment. and i was pleased to learn when i was in carolina last week meeting with the top state officials that north carolina is the state each day runs data in the evening to make sure that a child whose household, that child, household income changes, that that child is immediately eligible for free or reduced price meals, what we're referring to is a direct certification. that's one of the priorities in the healthy hunger-free kids act. it's a way to again make sure that children have access to affordable he dashed affordable meals. and north carolina is leading the nation in doing that daily. what we also are making and have changes and/or wic program, women and infant dashed at women, infants and children program, women, infant, and children program targeted pregnant women, lactating moms, young infants, children up to age five, that program, the wic program now serves 53% of all the infants in the united states, first year of life. and so it has a huge preventive health role, and that program, we made changes in so-called food package a year ago last october. that successfully implemented across the country. we have about 65,000 wic stores, so-called, across the country. they are required to have more depth of the stock as which is described in terms of healthy foods. and that has been successfully implemented. each month, about 9 million american moms and their children participate in the wic program. well, that new food package was based on recommendations that were made to us by the institute of medicine. well, that same institute of medicine has made recommendations to us to improve the nutrition standards and the food served and child care centers across the country through a program where opera called the child and adult care feeding program. we're very anxious to move forward with that each day about 3.3 million children are in child care or served in child childcare either before or after or during school hours based on age. and we know this is a very vulnerable group of children in terms of the need to make sure that they have sustained access to healthy foods. just as we did, as i mentioned earlier, the wic program, we commissioned them to help us with it. another aspect with the healthy hunger-free kids act redirects us in our snap, or the supplemental nutrition assisted program, or food stamps as it is still called in the 22 states, the direction we received was to put an additional focus in our s.n.a.p. education nutrition education on obesity prevention. and we've been working closely with partners, bill dietz and his colleagues at the cdc have been invaluable resources to us to help review standards to provide counsel and advice to make sure that we are using the latest science and findings and incorporating those into the nutrition education program that we finance. we are also of course the source of the icon that is just about a year old that was released a year ago, the first week in june. that anniversary is coming up and i'm pleased to see it viral across the country. i saw it in several other schools i visited just last week in north carolina. well, we are looking to do even more on that front as a way of again reminded americans, you know, enjoy your food, but the less, make half a plate fruits and vegetable to look for alternatives, drink more water, don't drink so many sugar-sweetened beverages. has a number of basic messages that can make a difference over time. additionally, this past week we announced the availability of $4 million in grants to expand the use of ppt, or electronic benefit, the cards are farmers markets across the country. again, part of an effort in adjunct to encourage low income folks to have better access to healthier foods. we have similarly a farm to school grant program that were promoting as well. but i also want to make reference to the food farm and forestry bill, the so-called farm bill that is looming, i hope it is going to take place this year, but we are particularly interested, and im a very strong advocate of the senate version of that bill for a number of reasons. one, it doesn't make the kind of cuts that the house proposes in the s.n.a.p. on the nutrition programs. but im particularly attracted to an element that is very much a part of that senate ag proposal for the farm bill that would give us the authority to require local stores that participate in the s.n.a.p. of the food stamp program to increase their depth of stocks. another way of describing those stores would be required to have more fruits and vegetables, more healthier foods, and more of them. and the reason i'm very attracted to that, there are now more than 230,000 stores across the country that participate in the s.n.a.p. program. s.n.a.p. is now an $80 billion a year program, so it's a major part of the business line for these stores, and i think these our tax dollars going into those stores. if we have the right to say we want to participate, happily sell. but we want to make sure that you are enabling low income persons who unveil themselves of that benefit to have more routine access to an array of healthier foods. so we are watching that very carefully. summer food, we are entering into pit of your where an american child is more likely to face -- and any other time of year. how so? schools will be out shortly. and we have a summer food service program that we are promoting this time of year. we have about 3 million, again, american kids who participate in the program but we are also promoting again the most nutritious for the summer food program to make sure that they are providing access to nutritious foods. my plate, smh, one year old. we spend about $1 billion a year in the food and nutrition service on nutrition education. 1 billion. at our flagship ever in that regard, or the dietary guidelines for all americans. we issued of those joined with the department of health and human services. we alternate every five years which federal agency takes the lead. we took the lead in 2010, now it shifts over to our colleagues at hhs, but we work very closely with them. and i do want to mention that dr. howard koh, whose is this a secretary for health, he oversees that ultimately at the upper level of the hhs with his colleagues at the cdc and nih. but we have a gap in the dietary guidelines, and that they currently provided from age two through the lifespan, and we are both committed, both federal agencies, in the 2015 versions to have available shortly thereafter recommendations for and since from birth through age two. to address a gap that currently exists. so, those dietary guidelines and we address of obesity in very, very different ways. i mentioned some of the advice that are characterized by the my plate. we also have a super tracker. we have almost 700,000 americans who are registered with our super tracker, which can give you advice on, you can punch in what you are eating, what kind of exercise you are having, and give you some direct information that we think would be very, very helpful to people. we've also been encouraging partnerships with health groups, with corporate groups and others on the my plate, again as a way to institutionalizing it, if you will, as part of efforts right across public and private agencies. finally, i want to say that week, every so many years, center for nutrition policy and promotion issues something called a healthy eating index. and very mindful of this because if you were to fully adhere to it, exercise but also default healthy foods, you get a score of 100. well hundred. well, i don't know if there any 100 scores across the country, but i can say that groups of americans throughout the demographic incomes, nobody gets higher than a 58. and low income people, a s.n.a.p. program or food stamp program get a 52. so they are marginally lower, but just so. we have a challenge as a country, both in the overall food environment but also in just habits and culture that we really need to address and overcome. we are very committed to do that through a variety of ways. we think healthy hunger free kids in schools are a major way. we think educating people through my plate is another, but also making a promoting an issue, better access to healthy foods and also encouraging access on a regular basis to reduce food insecurity. so thanks to all for being here today. look forward to questions. [applause] >> thank you, sally, for the introduction and it really is a great pleasure to be here with you today to talk about cdc's efforts in obesity. but before you that i just want to acknowledge the extraordinary work that you've done, kevin, at usda in terms of leading the efforts to change the program that supplies so many individuals in this country. it is been an extraordinary couple of years. i can't think of another time in our history come in our recent history, when the change has been this profound. i'm going to begin with three facts, and, regarding the prevalence, the cost and the caloric deficit when he to achieve, and then move on to what the targets are and strategy that we used to estimate those targets in a variety of settings, and close with where i think we need to go in the very near future. first observation is the prevalence in adults and children as relatively flat. there's one exception, african-american boys. the prevalence of obesity is still increasing, and that's been true for most groups for about 10 years. suggesting that we are maybe at a corner. but we have to remind ourselves, 34% of adults, 17% of it children and adolescents are still a beast and still as the girl will generate additional costs of obesity. those costs in a paper we published three years ago approximated about $150 billion a year, or 10% of the national health care budget. in two recent papers suggest that that, if anything, it's an underestimate of those costs. and, finally, a recent paper in the american journal of preventive medicine suggested the caloric deficit necessary to return of children to what was in 1970 before the epidemic started is relatively achievab achievable. that deficit on a daily basis for the next eight years is about 30 calories into to five euros, 150 calories and six to 11-year-olds, and 180 calories in adolescence. now that's the deficit over time and necessary to restore mean bmi to that level. that's not going to change very much the deficit necessary to reduce the obese individuals to a healthy weight. that deficit is more in the neighborhood of seven to 800 calories a day over that same time period, and that's not going to be achieved by the kind of policy systems and environmental changes the cdc has focused on. our efforts are to prevent obesity. where the nation's prevention agency. and i'm about the same strategies necessary for prevention are also essential to sustained weight loss after it occurs. and the issue about excess body weight is not that people can't lose weight, but they can't sustain those weight losses over time. so many of the same strategies were going to be using for prevention are also strategies relevant to weight maintenance after loss. now, the target behaviors that we are focused on our physical activity, breast-feeding, fruit and vegetable intake, reduced screen time, reduce energy density foods, and reduce sugar drink intake. those are targets. examples of the potential strategies we are using, for example, are to increase walking as a way of increasing physical activity. to put in place baby from the hospitals in which breast-feeding rather than the provision of when the is difficult. or healthy food financing initiatives, which put in supermarkets or other healthy food choices in smaller stores, as kevin was describing, in underserved areas. restoring water to schools. who would've thought 20 years ago that having water available in schools would be a significant issue? in boston, there are only about 30 schools that have potable water by virtue of the lead that exists in those pipes. or other strategies within communities like boston, to ban sugary drinks in all of the public settings that are controlled by the city. with respect to energy density procurement policies that changed the food availability in settings, and we just initiated and is now moving down through the general services administration, a procurement policy which sets standards for the food served in federal agencies. and one of the most notable groups that is getting on board with that is the department of defense, which is millions of people around the country and their dependents, and abroad. screen time is the biggest challenge, and the place where we are looking to limit screen time is really in settings where there's a regulatory approach to controlling television time. the places where we are trying to implement those strategies are a fraud and settings in which people spend time. and no single strategy and no single setting is likely to be successful, so our perspective is we need to implement multicomponent, multisectoral efforts. and i will give you a sense of what those might be. because the caloric deficit is so small a among two to five-year-olds, early care and education is an important targ target. and cabins assistance of years ago, we initiated an effort to focus on early care and education by convening a variety of groups that were invested in delivery of early care and education. that has subsequently been adopted by the let's move child care challenge. the first place initiative, and focuses on elimination of sugar drinks, low-fat or no fat milk, control of television time, "60 minutes" a day of active play, and the provision of water in place of sugar drinks. schools, kevin has already mentioned the healthy hunger-free kids act, which is going to help to transform those deals that are a fable. we are equally focused on the importance of physical education. schools are one of the few places remaining where children can be physically active and safe at the same time. a good example of worksites that we are invested in is creating healthy hospitals. healthy hospitals, hospital should be the healthiest worksites on the planet but it's part of their mission and yet we see fast food emporiums in children's hospitals across the country, but an increasing engagement to provide healthier options like the procurement policy that's going across the federal government in the hospitals. one of the new initiatives around communities was one started by the stimulus bill, stimulus bill which provided cdc with funds to fund a number of communities around the country to invest nutritional physical activity strategies in addition to tobacco prevention and control. that has been replaced now by the community transformation grants as part of the affordable care act. but the principles are the same. begin to government strategies which increase ss ability of healthy foods and improved physical activity as part of those strategies. .. >> so the question becomes where do we go next. the sustainability of the cdc programs that i've mentioned is particularly those in communities and within states is dependent on continued funding of the affordable care act and particularly in the affordable care act the prevention and public health fund which is what was supposed the grow to $1.5 billion by 2015. and as those of you who, um, have followed the student loan issue carefully know that there was an effort to deplete those funds, to pay for maintaining the student loan funds that are reduce -- at a reduced interest rate. that now has been pushed back, but that, the affordable care act and particularly the prevention and public health fund in the affordable care act, is highly vulnerable. and, therefore, our efforts in communities are highly vulnerable. kevin mentioned at our weight of the nation conference last week that the iom released a report entitled "accelerating progress and obesity prevention" which had five goals and a number of recommendations under each of those goals. these included making physical activity an integral and routine part of life and pointed to the build environment and the changes in the build environment, the kinds of strategies that commitments putting prevention to work and the community transformation grants are fostering. a second goal was to create food and beverage environments that insure that healthy food and beverage options are the routine, easy choice. improved restaurant options and procurement policies that improve the quality of foods available in a variety of settings. a third goal was to transform messages about physical activity and nutrition. this included positive marketing efforts as well as ongoing efforts to reduce the marketing of unhealthy foods, particularly to children. it also emphasized that healthy food retail that is already, as i mentioned, incorporated in our community programs. fourth was to expand the role of health care providers, insurers in obesity prevention and control. and i meant to mention earlier that, um, unlike many other public health challenges, there's both a prevention side to obesity prevention and control and a clinical side. because the individuals that have, who are already obese have such a substantial caloric deficit that they really are going to need aggressive clinical intervention. but there's an important opportunity here as we were sized -- emphasized in the iom report for be clinical and community partnerships to both complement, to be mutually complimentary in terms of obesity prevention and control. and the fifth recommendation was to make schools a national focal point for obesity prevention. so both the nutrition standards and school meals that kevin mentioned as well as the restoration of physical activity and joint use agreements for schools to be open to communities after hours so that the community can use those resources for physical activity was mandate of the apop, the accelerating progress of obesity prevention in the iom. the second initiative which also offers exceptional promise is the hbo special entitled "weight of the nation." we licensed hbo to use the handle of "weight of the nation." and as many of you know, there are four one-hour documentaries that have been released and are available on the hbo web site if you've not been able to view them as well as 12 short films which amplify some of the themes that are developed in the four documentaries including small films on tig ma, a very powerful film which emphasizes the discrimination that obese individuals suffer. but also films that point to community be solutions. there's a film on nashville which is one of our cppw communities in which the mayor's taken a leadership role to increase physical activity infrastructure, building sidewalks, extending bike trails as well as food-based initiatives. another important film is on latino health access, a group in santa ana, california, which documents the efforts to control obesity and its major sequela die piece. diabetes. and there's a very poignant, one of the most poignant moments in any of the films is when there's a small boy, a young boy who's overweight who goes to a parking lot after hours because that's the only access they have to a place where he can be physically active. and he says in just this most striking voice, can't they build a park somewhere, somewhere for us? isn't there someplace where we can go? and that is the problem, addressing the disparities. there's another film, in fact, on disparities, another on fruit and vegetable intake and others that i think will be useful in expanding what these films can do. these films were produced in association with nih and cdc. we were, the two federal agencies were responsible for assuring the accuracy, the content of those films. the films were supported by the michael and susan dell foundation and kaiser permanent today, and the iom was the group which facilitated the interaction of the four partners with hbo. but part of what was invested by the michael and susan dell foundation and kaiser permanente was an investment to extend these films as community action strategies. so there are 40,000 copies of the dvds with a screening kit that are available for use by communities or institutions. they link back to a community action kit which in turn links to a variety of resources on the hbo web site, and the links back are to cdc and kaiser permanente and other organizations that are invested in obesity control. and our hope is that these films can be used to foster a discussion at the local level and to begin to organize communities and institutions about what they can do to reverse this epidemic. so as i said at the beginning, i think we may be at a turning point. whether we can sustain the movement and energy that has accompany bed the epidemic -- accompanied the epidemic of obesity thus far remains to be seen, but the resources are there, and i hope increasingly, the political will is there. so i think i'll close, and we'll look forward to the discussion. >> thank you. [applause] so i have just a couple of questions, and then we want to open this up so it's very much of a dialogue. you both talked about the increasing collaborations between your agencies, and i wondered if you could both expand on that a little bit more and talk about what the impact has been on this synergy. >> i can begin by saying that i spent most of my career in state governments as the health and human service director in three states, been with the federal government for just under three years now. but the career people, the senior people that i work with on a daily basis all reflect to me that they have seen more cross the federal government interaction in this administration than over the life of their careers. and i can tell you that in the food nutrition area whether it's getting right down to -- i referenced the review that cdr made and recommendations to us more recently. bill dietz's sec or to have at cdc actually detailed or allowed somebody to come up and work at our center for nutrition policy and promotion both to help us better understand how cdc moves its initiatives, but also to share with the cdc how these policies and programs are developed on our side. howard coe was the health commissioner up in massachusetts when i was up in maine. we've carried that relationship over, and i think along with bill we're all red sox fans as well. but that has nothing to do with the health agenda. >> oh, no -- [laughter] mental health. [laughter] >> but we are, i mean, we have really a strong relationship with hhs in particular but also with the department of education as we move forward on our healthyier-free can kids act. -- healthy, hunger-free kids act. everything we do in the food arena we do through others, through state agencies, county agencies, food banks in some cases, public university extension services that provide much of the nutrition education. so it is at the core of our efforts often as i describe them, our relationships, and it is important we promote that to be good, to be good partners with other parts of the government, but also with the private sector. that's how we move things forward. so i think it is a very, it has been an environment of a lot of cooperation. and for us even internally in the u.s. department of education we work very closely particularly with the economic research service as an example, we just participated with them earlier this week in a wonderful study that they did on the issue of affordability of healthy foods. we're often fighting this old chestnut that says, gee, i can't afford to heat healthily. healthy foods are always more expensive. well, it depends on how you define it, and i think that's a very powerful study that they have done, and we're anxious to push it out to really challenge that, to say one can eat in a healthy manner. it takes planning, it takes prudence, takes access, but it can be done. >> i came to cdc in 1997, and up until this administration the principle collaborations which worked well were around the dietary guidelines and, also, the national fruit and vegetable alliance which was a very successful public/private partnership. but the degree of collaboration has really been extraordinary in the last three years, and kevin mentioned the interaction with cdc. from our perspective that interaction has occurred not only with usda, but within hhs across agencies that had not previously crab rated. a couple -- collaborated. a couple of examples are the interagency working group on food marketing to children which was a collaboration of usda, ftc, fda and cdc. another good example is the work that is going on, um, which i didn't mention, a million hearts, which is focused on aspirin/blood pressure control, cholesterol screening screeningd smoking cessation that is a join program with cms. the degree of collaboration around tobacco control between cdc and fda is another exceptional effort, and i suspect you heard earlier about the collaboration around food safety which crosses cdc, fda and usda. and, you know, it's hard to know why that progress didn't exist sooner, because these issues have moved forward so substantially in the last couple of to years. >> do we have questions out in the audience that -- and while we're, while chris is getting up, i'll ask just one more to bill, and then i have another one for kevin. if you look at this space, how do we achieve broader social change? what do you think it's going to take? >> as i, as i think i indicated, the changes in the food and physical activity environments really need to be transformative in order to reverse this epidemic. an douse to a social movement -- analogous to a social movement. and there's certainly a lot of movement, but i'm not yet sure that it's a movement. and one of the problems is that the constituencies around these issues are different. so the same group that promotes increased rates of breast-feeding and is passionate about it may be quite different than the group that wants to restrict the marketing of unhealthy food to children. and a second factor is that most social movements have not been top down the way the obesity epidemic has evolved with the government at several levels and a variety of medical groups and businesses driving it. it's really had a grassroots component. and that's what's missing. and what i hope the hbo documentaries will help foster. >> i think we have a question over here. >> yeah. hi, katie keefeer again from heritage radio network, sorry. mr. concannon, this is primarily a question for you. um, you know, i think we all applaud the, um, the success of, you know, the transformation of school lunch and so forth, and i know that i have interviewed personally dozens of people involved in improve offing nutrition in the school classrooms including ann cooper, the lunch lady and wellness in the schools in new york city which has been a successful program. one of the issues that comes up over and over again about improving school nutrition is the actual kitchen facilities themselves have been, essentially, dismantled so that all of the food that comes in is preprepared, they put it on a sheet pan, they throw it in the oven; and there's very little actual cooking going on and that the people who work in the lunchroom, the lunch ladies, don't have culinary skills. so my question to you is sort of twofold. one is, do -- is there funding for programs to retrain school cafeteria personnel and retrofit those kitchens and secondly, um, in an earlier session today scott faber from the environmental working group was talking about the entitlements in the upcoming farm bill, and one of the statistics he quoted which was incredibly dismaying is that $142 billion is being earmarked, um, as subsidies and entitlements for already-successful farm being operations and insurance companies which could, which don't need the money but are getting it. and i wondered if any of the money that is being proposed for those entities could be, um, you know, allocated back towards school lunch and programs that would help improve nutrition if schools by retrofitting kitchens, training personnel and creating regional distribution systems to get more fruits and vegetables from local area farmers? sorry about such a long question. anyway, there you go. >> the second question is actually a little easier for me to answer or respond to, and i'm not sure where he got those numbers. he's raising the issue of how we spending a churl dollars broadly -- agricultural dollars broadly. let me say the annual budget of the u.s. department of agriculture is in the area of around $150 billion. $105 billion of that comes to the nutrition area that i have responsibility for. so it's one of those public perception issues. if you ask the american people where's the agriculture department's budget, where does most of it go, most of it goes to the nutrition space. so, and i'm very proud of that. i think as americans we can be proud of that. be it has enjoyed over the years sort of bipartisan support. i hope that holds in this more challenged environment. so i guess, as i say, i'm not sure where some of those numbers came from. to your question about schools, let me say that i have, first of all, many schools historically over the years didn't have kitchens period, especially in older school buildings. kids brought their lunches from are home. so they were never adequately equipped from the point of view of many cases of having a full-blown kitchen. we have, we in the stimulus bill two years ago put out about $100 million in a matter of weeks. to help schools equip and modernize their school food service areas. within a short period of time, we had requests for $650 million. we had $900 million. -- $100 million. we had an additional $125 million in the last budget. there is no question about the fact that schools are really challenged in terms of their infrastructure environment around cooling particularly as we get into more vegetables and fruits and salads, etc. you need to have that cooling equipment as well. now, what many -- yet at the same time i've been in schools, i recall a school in denver i was at that has pretty old equipment, and they're doing all foods from scratch. actually whole grain breads, etc. so it can't be done. it's more of a challenge. in the healthy, hunger-free kids act, congress appropriated $50 million to us to provide training and technical assistance to school nutrition folks across the country. we're very committed to that. we're already engaged in that. we've been running something down in fredericksburg, virginia, for the past two years called produce safety university where we're enabling and educating school nutrition leaders on local purchasing so that they deal with safety issues, traceability, but also ways in which school foods are presented to engage children. some of the work of brian wantic up at cornell on how you structure foods to nudge kids, make the right choice the healthy choice. and so i've been able to see, i've been out to visit many, many schools. there are about 3,000 of them that have already met at least one level of the criteria from the healthy, the first lady's let's move! challenge, and those schools are doing it, many of them not without the latest equipment. so it can be done, it will be challenging, but i don't think we should -- i wouldn't be satisfied, nor to i think it would be reasonable to think that the majority of public and private schools can't meet the challenges of healthier foods that kids will consume even with the challenges they have in their infrastructure. >> are there questions out there? and while chris is doing the -- i'm going to ask -- go ahead. you got there fast, so -- >> not so far this time. thanks, chris. thanks to both of you for being here, this is save rah bourne from food and water watch. you mentioned the working group on food marketing to children, that's something we've been watching with interest and following the voluntary guidance that had been released, the proposed voluntary guidance, and we've been kind of disappointed that that seems to be back burnerred if i understand correctly. and i wonder if with the competitive food regulations that are going to be coming out in the next couple of weeks if voluntary guidance hasn't been the place where we can push on creating some kind of industry standard on food marketed to children if competitive food marketing standard might be de facto, if industry needs to meet these requirements to sell their foods in school, if we'll have any more widespread impact in other places where foods are marketed to children. >> i'll let kevin answer the competitive foods piece. and they're really two separate issues because the interagency working group was focused on marketing standards. and i think that the principles that we put in place for sound principles. -- were sound principles, the most important of which that a food marketed to children had to contain a meaningful amount of food recommended by the guidelines. and i think it's unfortunate that congress required us to do a, required the ftc to do a cost benefit be analysis before that report was submitted to congress because the children's food and beverage advertising initiative moved substantially in the direction of the principles that we articulated. but we weren't about to -- it made it impossible to do a cost benefit analysis because either way we were caught. how could we project the implementation of voluntary standards? and if we, even if we could do that, how could we predict what impact that would have long term on the health of children and adolescents as they became adults and, and how could we possibly fix a cost to that? so if we did, if we actually did a cost benefit analysis, we would be accused of doing something we didn't have to do and, therefore, we were moving towards a regulatory approach. these were voluntary standards, and only regulatory standards needed to have such a report. on the other hand, if we -- and if we submitted a report, it would be attacked based on the faulty assumptions that underlay the reasoning in the report. so we were stuck. and, um, it's -- chairman leibowitz said that in a congressional hearing, that at least for the time being that report was, that we weren't going to do anything further with the report. but competitive foods is yet another issue. >> competitive foods, let me say that we were talking about partnerships earlier in the federal government to an earlier question. happily, the healthy, hunger-free kids act had a very eclectic and interesting and effective group of partnerships. and among the partner participants that i highly value in a particular way was that of an organization here in this town called mission readiness, an organization of retired military senior leaders, admirals and generals that are, i think, in excess of 250 of them. they successfully lobbied the hill and lobbied the senate agriculture committee which was the original source of this in particular to make sure that we had the authority, unprecedented authority, around competitive foods in all schools across the country. and they did so because they recognize that this is a public health challenge in this country, something like 27% of young people, male and female, who would be in the typical age cohort to join the military are ineligible because they're so seriously overweight. and at the weight of the nation last week, bill and i, the panel we were a part of, a physician who is in charge of the, all of the health facilities across the world for active military pointed out a statistic that i was unaware of before that something like 24% of military personnel who are actively in the military are not allowed to renew their, their, to re-up so to speak because they are so seriously overweight. so there was a recognition here that we have to take some very broad, robust -- they can't be weak in terms of their impact. and i consider the competitive foods directive that we have as just as important as the school meal regulations that we've already promulgated. and so we've been working very hard on those and want to make sure that they are, in fact, they will become both the law of the land and will, basically, significantly alter the food environment for american children. as i say, i go out to schools, most of the schools i visit are schools that are brought to our attention as leaders. but i get into schools that for other reasons i happen to visit, and when i see some of the competitive foods that are being offered to kids at the same table with the school meal, you know, it just doesn't work that way. you wouldn't do it in your own household, or it shouldn't work that way. so we're very anxious to move forward with that. we have a mandate in that regard, but we know it's going to require the support of people in this room and beyond that as well. >> so while chris gets to the next question, i would also just like for those of you who are interested in this whole question of mission readiness, next week if you want to have another conference to go to, national journal has a conference that will be, um, next wednesday at union station. it's a summit looking at this very issue of readiness and obesity and what effect -- military readiness and what effect that is having. >> hi. my name's meg booth, i'm with the children's mental health project. we're a consumer organization, and i'm here because we work on prevention of dental disease which is, as you know, the number one chronic condition of childhood, and in the youngest kids, um, before they enter school it's the only portion of kids that have an increase in dental decay. the rest of the kids we're sort of seeing a decrease because of water flour ridization and other things. i'm here because we're trying to cross paths especially when it comes to pregnant women and kids under the age of 3. so i was wondering if you could answer the question, you sort of mentioned you're coming up with guidelines for kids birth to 2, and i was just curious to know if you've try today engage the dental community at all because they're trying to focus in on preventing tooth decay as because it's so diet-dependent. and as a consumer organization, i'd say we'd love to engage in how to join the nutrition world in those efforts. we can't do it by ourself, but how do we join efforts like that? and i think the 0-2 is the only place we can start other than pregnant women to do primary prevention, so i'm curious what those guidelines might be. >> well, it's early in the -- very early in the process. we, basically, just have outlined or devised the framework to work both, again, with hhs as the lead agency for the dietary guidelines 2015 which will govern officially ages 2 and above, but by agreement we will subsequently release guidelines for 0-2. and i saw just within the last week or so the outline of the work plan that has been devised with hhs and with the center for nutrition policy promotion and, i think, engaged undoubtedly cdc. and there are a whole series of consultations as this is developed to really to hear from the academy of pediatrics and the dental community and other nutrition and health organizations. there isn't as much, i'm told -- i'm not a scientist in this regard, but by our folks -- there isn't as much science around on 0-2, but we certainly see, you know, us distresses us if we see a child at a clinic going around with, you know, certainly sugar-sweetened beverages and so on. and i've seen this federally when i've visited federally-qualified health centers when i was a state person. so i fully expect there'll be broad consultation with groups like your own. >> i think we have another question here. >> hi. i want to thank both of you for sharing your update on the initiatives, um, and i can tell you from new york state, i've witnessed some great progress with the, um, school equipment grants, farm-to-school, the fresh fruit and vegetable program, even we had a healthy food/healthy community fund for store development which is healthy food financing initiative that's very similar to. so i'd like to push the envelope being from new york and a yankee fan -- [laughter] i want today ask about the dod fresh program and the concept of turning that into cash in lieu of or voucher program similar to the fresh -- ffmp, the farmers' market nutrition program, so that schools will have the option to pressure fresh local food of the highest quality that they can get their hands on at a, um, more efficiently, quicker and handle it within their own districts. thank you. >> well, thank you very much for that. the dod, what she's referring to is the department of defense. we have a contract nationally with the defense 40 gistics agency -- logistics agency out of philadelphia to purchase fruits and vegetables for both the school program, but for feeding program on indian reservations. it's about -- it's in excess of $100 million a year. her question, though, can we cash out a portion of that to allow local schools to purchase more fruits and vegetables either locally or on their own, the short answer is, no. and the reason i say, no, is this: most schools that that, the representation or what the dod fresh program represents as a portion of school purchases is a fraction. it's under 20%. where schools have -- they can spend the money that we give them $2.77 per money in whatever way they wish. they can use that, buy it all locally, or they can use a portion of it to buy usda commodities. we've had that question from another state up in another part of -- or in that region of the country, and our answer was we don't want to weaken the leveraging we have through dod to add our money to their purchases for military bases and dependents. by pooling our resources, it has an effect on price. and to the extent we start cashing it out, we lose that margin. but we understand, we're very sympathetic to schools wanting to do more local purchasing, if that's what you interesting -- you're interested in. but we say use some of the money you get from us or from private-paying students to that local purchasing. >> so i think we are just about out of time -- is there one more question? >> one or two more. >> okay. >> hi. um, you talked about whether eating healthier is more expensive than, um, or, like, the costs of that. so i was just wondering, i think that eating healthier can be just as inexpensive if you know what to do. but i think that a lot of the food knowledge and cooking knowledge has been lost. can you talk about what you guys are doing in terms of food education and educating people on how to eat healthy and know what to do? >> i think that study that i referred to you was just released yesterday or the day before by the economic research service. i'd encourage people to look at it because it's very compelling. they look at food costs by calorie, by value, by portion. and, obviously, timeliness is another factor in all of this. but they point out that fruits and vegetables among food groups are the least costly and that the economist, i know at the briefing i was at, compared the number of calories in a doughnut versus a medium-sized banana, and the banana being, you know, less expensive than the doughnut and far healthier for you. so there are a number of very practical sort of messages that way. but i want to say on that access to healthy foods, we're very mindful -- and bill referenced this in his remarks -- we're very mindful of the access question. i know that in the food stamp or the s.n.a.p. program about in excess of 90% of food stamp recipients have access to supermarkets or spend part of their benefits at least once during the month at a supermarket. so, but we also know that the vast majority of stores that are authorized to process those benefits are small stores. and i go into a 7-eleven pretty routinely out in maryland here, and i see a few bananas and a few other things, but by and large it's pretty lean in terms of healthy food. so part of our effort is to, what we're thinking about this depth of stock which to me would be a step forward. not the silver bullet, but certainly a step forward. but also the healthy food financing initiative that's been referenced to try to deploy more or to encourage more supermarkets in poorer areas. but it's also education. so part of that is educating, using the collective resources in our nutrition education. and we are, you know, examining that internally. i mentioned in my remarks we spend about a billion dollars a year if you add it all together. the center for nutrition policy, nutrition education for week in the wic program, s.n.a.p. education for people in the food stamp program, the feeding program on indian reservations, all of which have nutrition education components. so jerry mann who's with me today, senior policy adviser, where he is reaching out at our request to cdc, to the indian health service, to a variety of sources in the federal government to say what are we doing all of us collectively, and what do we know, and are there additional ways we can really have an effect in terms of nutrition education? i personally am very wedded to and enthusiastic if you can't tell about the my plate. because i think the message is actionable. it's not that food pyramid that was wonderful for professionals but not so practical for the average person. the my plate or mi plato, make half your plate fruits and vegetables. it's pretty basic. and i've seen it in a number of these schools i've been visiting where in the health sciences programs or in the classes, the teachers are using that outline, that template and then having the kids write in, fill in the quadrant, so to speak. and the more we can reinforce this, we've talked about food culture, understanding. that is, again, one of the tools that i think is a powerful one that's right before us. >> i guess, i think we -- i think we are out of time. chris, are you coming up for a couple last remarks? >> i just wanted to thank both of our speakers and thank you all very much for attending the food policy governance, and we'll see you next year. thank you. [applause] [inaudible conversations] >> today the cato institute hosts a forum on the future of the u.s. navy surface combatant fleet. in light of military spending cuts. representatives from the navy and defense analysts talk about the elimination of cruisers, the building of more complex destroyers and the introduction of a new class of small service combat sips. the live forum gets under way at noon over on c-span. and later, john paul stevens speaks to the annual meeting of the american law institute here in washington. the event brings together judges, attorneys and legal scholars from across the country to address various legal issues. you can watch his remarks live beginning at 2 p.m. eastern, also on c-span. >> i think this is one of those markets that i think people vote for the, um, don't vote for the party. i think this is the city of wichita that votes for the candidate. even though this is heavily republican, midwest which is dynamic and it's great, but i think you're seeing more of that in the recent years here in the midwest. they are really voting a little bit more for what the person?? stands for. >> june 2nd and 3rd, booktv and american history tv explore the heritage and literary culture of wichita, kansas.? >> the first place i want to show you is the monger house, and it is the only remaining, original structure from the 1865-1870 time. and it was a very important be building in hour history in that it is a residence, but it's also the headquarters of the wichita town and land company that came down here to create, shall we say, the city of wichita. >> watch for booktv and american history tv in wichita on june 2nd and 3rd on c-span2 and 3. >> a house subcommittee recently held an oversight hearing on the effectiveness of the u.s. fired a manager. witnesses included the agency's administrator and other officials from fire prevention groups. authorization of the fired a manager expires september 30th. senators joe lieberman and susan collins have introduced legislation that would reauthorize funding through 2017. the hearing runs just over an hour. >> the subcommittee on technology and innovation will come to order. good morning. welcome to today's hearing entitled -- [inaudible] fired a manager priorities n. front of you are packets containing the disclosures for today's witnesses. i now recognize myself for five minutes for an opening statement. today's hearing is being held to review the fire service community's priorities for the future of the united states fired a manager, the usfa. the usfa was established following the 1973 report of the national commission on fire prevention and scroll -- control which recommended the creation of a federal fire agency to provide support to state and local governments and private fire organization in their efforts to reduce fire deaths, injuries and property loss. the usfa is a substantial public safety mission. although the country's fire death rate continues to decline, it is higher than more than half of the industrialized countries. the usfa prepares first responders and health care leaders to react to hazard and terrorism emergencies. it sports the efforts of state and local governments by providing training for first responders, educational programs and targeted outreach for communities and conducting and coordinating the research and development of technologies for the fire be service. the usfa also assists with data collection, analysis and the dissemination of best practices for the nation's fire prevention and control in emergency medical services activities. in recent years there's been an escalation of severe wildfires resulting in home and property loss. this can be attributed to expanding development in wildland areas which include an abundance of burnable brush and trees. 2011 was an exceptional year for wildfires in the united states. and major blazes affected my home state of arizona. in late may 2011, the wallow fire raced across eastern arizona forcing the evacuation of thousands of residents and burning more than 469,000 acres, making it the largest in arizona's history. the fire's believed to have started after a campfire blew out of control and spread quickly due to dry weather and fierce winds. over 4,000 firefighters were assigned to the wallow fire. currently, there are hundreds of firefighters working to contain at least four blazes in central and eastern arizona. this represents just a fraction of the thousands of first responders and firefighters who risk their lives each and every day battling fires across the country. the usfa supports these individuals. they don't take their responsibilities lightly, and i as an authorizer of the usfa, neither do i. the testimony of our witnesses this morning should help the members of the subcommittee understand the priorities of usfa. in order to better enable the usfa's continued efforts to reduce fire deaths, injuries and property loss. we thank our witnesses for being here today, and we look forward to your testimony. i now recognize the gentle lady from maryland, the ranking member of the subcommittee, ms. edwards, for her opening statement. >> thank you, mr. chairman, and thank you for calling this morning's hearing to examine the activities and priorities of the united states fired fired a man. i'm very pleased to welcome chief mitchell so we can hear more about his vision for the administration, particularly pleased to welcome my good friend, kevin o'connor, as well as our other witnesses. and i want to thank you for taking the time out of your schedules to be with us. the fired a manager was created in 1974 with the goal of reducing the number of fire-related deaths by half from a staggering 12,000 per year. through the good work of the fired a manager and our first respond beers, we met this goal in 1988. the number of fire-related deaths continues to decline, but unfortunately our country's fire-related death rate is still one of the highest in the industrialized world, and it's estimated that in 2009 fire cost the united states over $331 billion in economic and human losses. chairman quayle just spoke about the loss in his own state. the fired fired a manager contio play a central role in making our communities safer. through research and fire fighting training and for increasing fire prevention and preparedness through public education ask awareness activities. certainly, fires are still a major problem in the country, and the fire administration's continued leadership is critical. however, we can't ignore the fact that our firefighters are not just fighting fires anymore. on any given day, our firefighters are rushing to the scene in response to over 72,000 calls that range from scope from a house fire to a car crash to a hazardous materials spill to a medical emergency. the truth is that our firefighters are our first responders in all types of emergencies, including terrorist attacks and natural disasters. and the range of training and education they need to be successful must expand and evolve to reflect this reality. as part of the fire administration's last reauthorization in 2008, we etch sized the need -- emphasized the need to advance training in the, for example, emergency medical services and hazardous material response. i'll be interested in hearing today about the status of those advances and learn from our witnesses whether the fire administration's training courses are, in fact, meeting the expanded, all-hazards needs of today's fire service. i'm also interested in hearing about the current state of fire-related research, any emerging research areas or existing gaps and how the fire administration is contributing to these efforts. i'd also like to learn more about how they prioritize research and investment and how it coordinates its research activities with other federal entities engaged in fire-related research. including the national institutes of standards and technology and the science and technology directorate within the department of homeland security. more or importantly, however, i'm interested in hearing recommendations or suggestions about what ought to be included in the next fire administration reauthorization bill. as you're aware, the current authorization from the prior administration expires in the just over four months. i'm pleased that we're holding this hearing today, and i think it's an important first step. and i sincerely hope that the decision to call this hearing is an indication that there are plans to draft and move a reauthorization bill through this committee in the coming weeks. i hope the chairman will be able to provide some insight into these plans this morning. and as you may be aware, our colleagues in the senate passed a fire administration reauthorization bill through the committee on homeland security and governmental affairs just yesterday. i believe we also have an obligation and an opportunity to insure that the fire administration's authority continues uninterrupted, and i look forward to working with the chairman towards that end. again, mr. chairman, thank you for holding this important hearing. the fire administration plays an essential role in insuring that our firefighters who are so critical to the safety and resiliency of our nation have the tools they need to protect us and keep us out of harm's way. i'm looking forward to hearing from our witnesses about the tools congress can provide the fire administration that will allow them to assist fire didn'ts across -- departments across the country, and i yield the balance of my time. >> thank you, ms. edwards. if there are members who wish to submit opening statements, they will be added to the record at this point. at this time, we'll proceed to hear from each of our witnesses in order. our first witness is chief ernest -- next we'll hear from dr. john hall jr., director of the national fire protection association. dr. hall has been active in fire able sis and fire research for nearly 35 years. our third witness is chief jim critchley. chief critchley represents the tucson fire department in my home state of arizona and also currently serves as the president of the western fire chiefs' association. our final witness is mr. kevin o'connor, assistant to the general president for the international association of fire tight -- firefighters. spoken testimony is limited to five minutes each. after all witnesses have spoken, members of the committee will have five minutes each to ask questions. i now recognize our first witness, the united states fired a morer, ernest mitchell. >> good morning, chairman quayle, ranking member edwards and distinguished members of the committee. my name is ernest mitchell jr., i'm an assistant administrator at the federal emergency management agency and the united states fire, administrator in charge of the united states fire administration at the department of homeland security. it is, indeed, an honor to appear before you today to discuss the u.s. fire administration. the fire administration is committed to providing national leadership to forcer a solid foundation for our stakeholders in prevention, preparedness and response. in my testimony today,ly share on overview of the administration's core functions, major priorities and present activities and goals. despite making progress over time, fire losses in the united states have been higher than in most of the industrialized world. this has held true in both fire deaths and dollar loss rates. thousands of americans die each year, and thousands more are injured, property losses reach billions of dollars. average annual fire losses in the united states greatly exceed those from floods, hurricanes, tornadoes, earthquakes and other natural disasters combined in our country. the fire administration is a national leader in providing fire safety and prevention programs to help decrease tragic losses. we also lead the way in preparing communities to respond to fires and other hazards in the line of fema's whole community approach to emergency management. we are supporting the efforts of local communities to reduce the number of fires and fire deaths and champion federal fire prevention and control efforts and coordinate information about fire programs throughout the country. there are four traditional stars of the fire administration and one relatively new, a budding star that we have initiated more recently. one is data collection. the national fire data center administers a national system for collecting, analyzing and disseminating data and information on fire and other energy incidents to state and local governments and the fire community. two is through public education and awareness, through partnerships and special initiatives, the fire administration involves the fire service, the media, other federal agencies and safety interest groups in the development and delivery of fire be safety awareness in education programs. three is training. the national fire academy offers educational opportunities for the advanced professional development of the mid-level and senior fire and emergency medical services officers and the allied professionals involved in fire prevention and life safety activities. four is research and technology. through research, testing and evaluation, the fire administration works with public and private entities to promote and improve fire and life safety. research and special studies are conducted on fire detection, suppression and notification systems as well as issues related to firefighter and emergency responder health and safety. five, and the more recent, is technical assistance and response. it's a recent initiative for the fire administration in developing a national firefighter deployment strategy. the mission's purpose is to establish an overall, multidisciplined response in recovery support mechanism for fema by establishing a structured approach engaging and enhassing the nation's approach to emergency medical services skill sets, thereby expanding the capacity for responding and providing faster, coordinated efforts to contain and minimize losses of life and property during disasters. within the scope of these efforts, it is essential that we work on multiple levels and with a wide variety of partners. we engage governmental and private stakeholders and partners in evaluating programs that will address the emerging fire response needs. one example is our collaboration with the national fire protection association on the home fire sprinkler coalition, and the mission of that coalition is to inform consumers about life-saving benefits of installing home fire sprinkler systems. the more recent or emerging star has been utilized already at this point to respond to disasters. and as a result, it has had some success. we provided technical expertise and assistance during the development of all hazard management teams across the country. we have responded to and demonstrated effectiveness in the 2011 flooding in colorado, alabama, georgia and during this april's tornadoes in texas. graduates of our highly-sought-after programs have contributed to and participated in these events. given the dynamics of our times, the fire administration has identified five broad goals as a framework to provide national leadership on fire safety issues. we will continue to pursue these goals through the existing programs while evaluating issues and instituting new initiatives relevant to our current and future operating climate. thank you, mr. chairman, for giving me this opportunity to appear before you today. your continued support is greatly appreciated. i would be glad to answer any questions you might have. >> thank you very much, administrator mitchell. i now recognize dr. hall to present his testimony. >> mr. chairman, members of congress, my name is john hall, and i am here on behalf of the national fire protection association to communicate our very strong support for the reauthorization of the u.s. fire administration. next year marks the 40th anniversary of america burning. of the 90 recommendations in that report, the first was for establishment of a u.s. fire administration, quote, to provide a national focus for the nation's fire problem, unquote. the report also identified tasks appropriate to the federal role in what would continue to be primarily a local responsibility. quote: technical and educational assistance to state and local governments, collecting and analyzing fire information, conducting research and development in certain areas and providing financial assistance when adequate fire protection lies beyond a community's means, unquote. the usfa has maintained this mandated focus throughout its existence. the report also set out ambitious goals saying, quote: a reduction of 50 percent in deaths, injuries and property losses is quite possible within the next generation, unquote. how has america done on this goal? civilian fire deaths te can kleined by about 60%. fire firefighter on-duty fatalities declined by half, civilian fire injuries by about 40%, firefighter injuries by about a third and direct property damage by about one-quarter. even so, we still have some of the highest fire loss rates in the developed world. we know how far we have come, but we also know how much better we can do because we see greater safety in countries like us. and thanks to the national fire incident reporting system, nfers, use with the the nfpa survey, we have a greater ability to target problems and to design and evaluate programs than any other country in the world. in the years since the usfa was founded, the fire service has transformed itself into an all-hazard emergency response force. reported fires have declined by more than half since 1980. however, hazardous material responses have more than doubled, and medical aid calls have more than tripled. imagine a gasoline tank truck rolling over on a highway in a small community. the truck was built and loaded in this other states and crashed on an interstate built and maintained by the federal government. the fire department will be expected to contain the spill and clean up in accordance with state and national environmental regulations using training and personnel/equipment in compliance with national consensus standards. it is far from easy to find the local responsibility in such an incident. now add in natural disasters, terrorist attacks and fire scenarios unheard of two decades ago such as a bushing building with -- burning building with a roof covered with photovoltaic solar power cells. we have asked our fire service to perform more varied tasks with more rules whenever something goes wrong. they have responded to every challenge and everything we have asked of them. but it takes a nation to save a village. they need our help. for nearly 40 years, the usfa has been there. recent surveys of fire service needs conducted by nfpa in cooperation with the usfa have found the following: by comparison with national standards, the fire service has extensive needs for every type of resource. fire departments serving the smallest commitments are most likely to have needs. although the needs are still great, there have been, has been great progress. the assistance to firefighters and safer grant programs have been well targeted to real needs and collectively effective in reducing the needs they targeted. america burning identified research as a priority. the usfa has filled research gaps and complemented research partners when appropriate. some major, current or recent projects the usfa has led or supported include the following: the next generation of home fire alarms, the next generation of firefighter personal protective clothing, safety in the wildland/urban interface and decision support tools for dealing with unwanted alarms. nfpa salutes chief ernie mitchell, newly-confirmed fired a morer, and latest in a distinguished line of leaders who have headed the usfa. we look toward to working with him. so to sum up, nfpa urges you to reauthorize the usfa. we urge you to provide requested funding, its research program, the academies' training program and nfers. the usfa does great work, they have made a great difference, and they can and will do more all in keeping with the original vision of an agency that would provide a national focus on fire through effective actions appropriate to a federal role. be thank you very much for the opportunity to speak with you on behalf of nfpa, and like chief mitchell, i will be happy to answer your questions. >> thank you, dr. hall. now recognize chief critchley for five minutes to present his testimony. >> good morning, chairman quayle and ranking member edwards. i am chief critchley of the tucson fire department and the president of the western fire chiefs' association. i am also a member of the international association of fire chiefs. i thank the committee for the opportunity to testify about the vital work that the u.s. fire administration does for america's fire and emergency medical service. it is important to recognize the major accomplishments that have taken place since the usfa was created in the 1970s. in 1978, 172 firefighters died in the line of duty. in 2011 we had 83 firefighters, a decline of more than 50%. in 1978 we had, we have seen the number of civilian fire deaths also drop over 50% to a little over 3,000 in 2010. united states fire administration has played a major role in these accomplishments through fire service training, public education and research. as a local chief, i would like to especially emphasize the importance of the national fire academy which used online training -- online learning, train the trainer programs, on-campus programs and other educational tools to train more than half a million responders in 2007. um, through 2011. i am proud to be one of the more than 6,000 arizonan is who has completed the classes during this time period. a highlight is the executive fire officer program. this program is a gold standard for developing transformative fire officers ready to deal with the nation's future challenges. as a local fire service instructor, the nfa provides educational material based on national best practices to help me train the next generation of fire service leaders. this training provides interoperability at the incident scene of many national disasters. the ufsa also provides action through the national fire data center and the national fire incident reporting system. the nfirs allows local fire departments to report or incidents in their area and identify national trends. for example, i use the usfa report to compare their statistical data in the incidents that i have in tucson. this capability allows me to prepare for the future threats that may, that -- to my citizens. .. of only 45 million is not a large federal spending program. outward, the agency played an effective role in the inherently governmental function of protecting the american public. we also would like to express the support for the efforts to clarify that the u.s. as a should be the lead agency of non-wildland incidents in the emergency support function number four. the firefighting at act. the u.s. as a and the use of force service come have a memorandum of understanding which allows the usfa to act as a support agency. local fire departments work well with the force of service and courtney wildland fires. however, based on its relationship with the nation's fire and emergency services, we think the m.o.u. should continue with usfa playing a strong and primary role in structural events, terrorist attacks on non-wildland national wildland fire incident. we've support the establishment of firefighters that can quickly deployed in the event of a major all hazards disaster. as we witnessed in arizona last year, local fire departments are the first on the scene and the last to leave. these support teams can provide a major benefit to the fire chiefs by helping the incident management recovery activities in working with a state, tribal, and local agencies. current authorization for the u.s. of a express on september 30. in the senate, senators joe lieberman and susan collins have introduced markup 2218. this bill would authorize funding for the usfa through fiscal year 2017. on half of the leadership of the nation's fire and ems services, i asked the committee consider companion legislation this year. i would like to thank this committee for been continued support of the nation's fire service over the years. we have made major progress in reducing the tragedy of fireballs in the past 30 years. however, we have much work to do. thank you for holding this hearing and i look forward to answering any of your questions. thank you. >> thank you, chief critchley. i now recognize mr. o'connor for his opening statement. >> thank you, i'm kevin o'connor represent international association of firefighters whose 300,000 members proudly serve communities in each of the nation's 435 congressional district. i'm especially pleased to be before the subcommittee because i'm currently a constituent member john sarbanes -- will be a proud constituent of the ranking member. as firefighters take additional responsibilities and expanding our capabilities to meet total response needs of our communities, so, too, must the fire administration evolve to the 21st century fire service. today the firefighters whose primary function was to simply put out fires. today's firefighters are well-educated, highly trained and skilled, all-purpose emergency responders with broad responsibilities ranging from ems, hazmat response, wmd, on all hazards response. most significantly, your firefighters are always the first boots on the ground for any man-made or natural disaster. the prevalence of fire-based ems delivery systems requires the agency to fully integrate ems training and preparedness into its mission. although usfa is beginning to move in that direction we want to ensure that ems be afforded appropriate recognition and attention. while the fire administration continues to integrate all hazards training and preparedness into all of its programs, it must work to change the perception it is primarily focused simply on fire. one way that problem may be solved is to simply change the agency's name to reflect this current mission. the u.s. fire ems and all hazards administration, or similar brand, would better describe the expanded role of those of modern fire service and the agency. after the well-publicized problems from hurricane katrina, problem -- him usfa is pretty working to develop a better means of cordoning existing state and local response for disaster deployment. currently the agency is considering organizing firefighters and other responders to support fema disaster response and recovery efforts. the i a as that fully supports this endeavor. but we must ensure that firefighters are appropriate to utilize and deployed during any disaster. during the delayed response to hurricane katrina, fema called up 1000 firefighters to serve as community relations officers, tasking them with the distribution, instead of the point is well trained responders to the front line where the presence was desperately need. frankly, it was a tragic waste of resources and capability. the iaff hopes to partner with usfa and fema to ensure the personal resources are properly identified and utilize during emergencies. the best way to a published that goal is to establish a national firefighter credential. in the past too many well-meaning firefighters have self dispatched in emergency but many of those firefighters have lacked the requisite training and experience to operate effectively. national credentialing system will alleviate that uncertainty by based on training and certification levels. this will enable incident commanders to make the most appropriate use of the most valuable resource, personnel. the establishment or credentialing system has been in developing fema since 2006. there is simply no excuse for this long delay. the project needs to be completed. most importantly, usfa serves as a voice of the fire service in federal government. unfortunately, the fire administration's ability to represent the fire service at the federal level is compromised by a lack of adequate funding. usfa has long struggled in sufficient and resources. the current authorization level must be maintained for the agency to carry out its mission. and i urge this subcommittee to retain or even increase the current authorization level. rest assured, we will be making the same case to your colleagues and appropriations. lastly i would like to address a prior congressional recommendation that and argue usfa has been slow to implement. the u.s. fire academy is professional development of fire service through training and education. today the academy offers distance learning train, locally sponsored centers throughout the state to expand its ability to serve individuals who are unable to attend training. to expand the academy's reach, congress authorized usfa to partner with nationally recognized organizations to establish fire service training programs to deliver a portion of the agency's dream. organization such as the iaff provide excellent partners to conduct real-world training a few institutions can match. through such partnership, usfa could easily cost effectively increase the number of firefighters that benefit from this training program. we look forward to working with chief mitchell and his role and hopefully into mending this program. this concludes my testimony. i thank you for the opportunity to speak before today, and like my colleague, ready to answer any question. >> now i want to thank all of the witnesses for the testimony and also for being right at the five minute button. that is a rarity on capitol hill, and i thank you for your punctuality. i want to remind members of the committee rules. limit questioning to five minutes. the chair would at this point open the round of questions and recognize myself for five minutes. chief mitchell, as we were examined the usfa, we are interested in what changes should be made to the maintenance of authorities. currently serves as a sub board of forest service and the federal emergency management agency, emergency support function number four, firefighting and expect these doctors are signed at the discretion of homeland security. some in the fire service community have recommended the usfa should be elevated to cult leader with the u.s. forest service to assure more effective and local response to what the u.s. of a. be able to handle this responsibility? and to your nose, as the department explore the possibility of making this change with the forest service? >> thank you, mr. chairman. yes, the short answer is yes, we have explored it. in fact, we have come up with a couple of initiatives that would allow us to participate more in response. we are meeting with fema response of leadership at this time, this very week. and also meeting with the u.s. forest service to discuss how we could coordinate dual coordinators within usfa 4. we have a lot of ideas on how we can do that, and partnering with the other fire service, nongovernmental organizations and state and regional agencies to provide some level of coordination to disaster response across the country through some of the existing agreements and contracts. and so, there was a point where we wondered if we had that authority. we talked with our legal folks and we do find that fema administrator has the authority to write us into that program. so right now we are just trying to coordinate that effort with the forest service and do in a way that is acceptable to all the parties involved. >> great, thank you. and chief critchley, how would having the u.s. -- usfa leader a co-leader to the u.s. forest service under usfa 4 strengthen and complement the fires response to all hazards? >> at this time, we are learning the same incident management type that the forest service uses, yet we have some specific entities, specific duties that we do in an event that the forest service model doesn't address in the hazmat, technical rescue during a big fire scene. i think this just will build up the strength of it if we are both part of that decision-making instead of just one and then coming to a support agency. if we're both there with our voices think this is the best way to go, i think that's a much better in the product and having to wait for support. >> thank you. and chief mitchell, leveraging our anti-underway to different agencies, there's ongoing research at dhs, and this fire safety research is looking at fire retardant materials to protect firefighters. how does the usfa chordate its research with nist, with the department of homeland security and defense? >> we meet regularly both, which is added and on site meeting last week at nist. we partner with nfpa. we partner with the underwriters laboratories. we partner with, we're talking right now with recently with oak ridge laboratories about new smoke technology -- smoke detectors technology. we continue have communications through our team that works on technology and research at u.s. -- usfa instead constantine occasion. we gather input from our fire service stakeholders, and the other nongovernmental organizations across the country, and in the fire service. has to need, we communicate those with the technology agencies and laboratories and partners. and try to see that our needs are being met by the research community. >> have you experienced any sort of problems with actually getting the level of cooperation between the different agencies? sometimes we hear that it's hard to get information from one agency, working with another agency. >> i've only recently come in to the federal government. and so the level of bureaucracy -- >> you can say, go ahead and. >> that you maybe need to go through to go from one step to the next is a little different than local government. but no, the people engaged are very cooperative. i think though that sometimes the process and our level of resource that supports us being engage in the research process probably limits our ability to move forward faster. but we work with them to the extent that we can. >> thank you very much. i now recognize the ranking member, ms. edwards, for five minutes. >> thank you, mr. chairman, and thank you to our witnesses. my staff actually just recently had a chance to spend a day at our fire training academy, and i have to say for the work of firefighters and our chief, chief critchley, you know, on the ground, that's not for the faint of heart. so i really appreciate what you do for all of our communities. in your testimony, mr. o'connor and chief critchley, both of you, and will allow you to answer this question out of respect for administrator mitchell, and i'll share with you want to you both expressed concerns over the administration's current level of funding and you describe the impact, this declining budget is having on the fire administrations activities. and specifically, chief critchley, you mentioned that the fire administration will be able to complete modernization of the fire incident reporting system, the national fire incident reporting system, and that a number of courses offered at the fire academy will be unlimited and new courses will not be developed. i wonder if you can comment on the ability of the fire administration to fulfill its mission, especially as you know what the needs are, both for the western states but at the most local level. and i wonder if the two of you could comment on what these budget constraints mean, and what level of authorized funding do you think ought to be included in a reauthorizing bill as we move forward through congress? chief? >> so, to the first point about the losses that we've seen in the unit, into u.s. fire administration pacifica, the national fire academy, we have seen a reduction in the number of courses. wide-ranging courses from hazardous material to prevention to deployment for command and control. lots of those have been reduced. we've seen wonderful program called the trade program that is also looking at a reduction in funding. in the trade program is where i met fire chief ga we can get real-time numbers. i believe that's an incredible -- >> what you're sharing with us is that a reduction in the budget, because it's a fairly mean agency has real impact locally. mr. o'connor, to have a comment about that? >> just to piggyback on what the chief reference. we all recognize that fire service is inherently global operation. but the chairman reference the landmark america's burning of 1973. frankly congress recognized federal government as a means to the agency to this voice of our service and you describe the need, as crude. some of my testimony was predicated on the ms. of issues such as credentialing. i don't offer that as a criticism. with the limited resources diminishing, usfa is having a hard time doing its job. the simple reality is the authorization level is great. it needs to be at least to the current level. that it serving is to be appropriate. this is a link agency. there's not a lot of fat and its supporting over 300,000 professional firefighters and public twice and have as many volunteers from across the country in every community and we just would congress to recognize that this is an efficient use of the federal fund. it's protecting communities and that really is governments most basic responsibility. >> administrator mitchell, if i could just ask you, in terms of what firefighters need and departments need all across the country, some of the things credentialing and others, you would like to capacity to be able to deliver those things, is that correct? >> yes. i would like to expand our capacity, and really, since i've been at the fire administration i thought we had actual people working there. they have a plan that is outstanding. we do not have really the resources to carry all elements through expeditiously. so the productions have limited and retorted our ability to move forward with some of the newer programs that we need to move forward. >> thank you. and i yield. >> i recognize the chairman of the full committee, the gentleman from texas, mr. hall for five minutes. mr. chairman, i do think you and i thank this panel. you have such an important job and it's important to the smallest group of firefighters to the big cities. i think your testimony, and you've given your time and the services you render really ought to be appreciated by this committee. and i think we do. along the line of ms. edwards questions, she and i kind of work as a team a lot of times. i want to enlarge a low bit on her questions and some of the answers that you have given. my dad was a firefighter in the smallest county in the state of texas, 254 counties. they were the smallest. they had a fire department, one truck. the simon would go off at night and nobody could hear it. i could hear it, too. it would wake me up. my dad would get up and run all the way to the fire station because they wanted to be there, the first one there got to drive the one truck they had. there was always a race. windows all over they would come home, i would ask that can how did it go? he said, well we saved a lot. usually was his answer. but it means a lot. we have to rely on you. i guess, administrator mitchell, i'll ask you, how does the united states fire administration and how do support the rural fire departments? i have a lot of in my fourth congressional district there. how do you support those? i guess the fundamental difference is in the nature of the rural fire problems compared to the u.s. fire problem as a whole. and i'll say this but it sadly and have a 9/11 to get really people to appreciate you all the way they should. a lot of communities are protected by volunteer fire departments and face their unique challenges, agricultural fires, fires in wildland and urban areas. does usfa offer training especially care to volunteer firefighters? and what type of resources have you developed to assist fire departments operating in rural communities? i guess -- you want me to repeat that? >> i think i get it, thank you, congressman. spent do you want me to repeat at? >> yes, we have courses specifically tailored for volunteers. largely what we have are offering his courses we work with volunteers to try to make them more available, recognizing the difficulties, having the time to get additional training, so we work more to expand the online offerings into the field courses that go out through states, state fire training to much of the basic training is done locally. and so those are handled outside. what we do try to do, or do on a larger basis is a lot of the online. with respect to rural areas and wildlands, we have courses in development right now for wildland and urban interface fire star trek though structures close to the wildland they went wildland coarser being offered to the national wildland courtney kube. so i guess the overall and is that we are reaching out, trying to make the courses more available to the volunteers and working with a volunteer association also that helps that to happen. >> i thank you for that and i think it's very important and i yield back my time, mr. chairman. >> thank you very much, mr. chairman. and i now recognize ms. domenici for five minutes. >> thank you very much, mr. chairman. i want to join the other members of this committee in thanking you all for the work that you do to keep our communities safe. administrator mitchell, in your testimony, you talk about the indirect costs of fire. and estimate that according to your testimony here, the indirect costs which include things like lost business, medical expenses, temporary lodging, psychological damage, maybe as much as eight and half times higher than the direct cost of fire. that emphasizes the importance, training and education and prevention. and i know that right now many communities, not only in my district and state but across this country come are struggling and don't have the resources they need at the local level. to do all the work that they need to do. and so what i would like you to do, maybe dr. hall, because you mentioned this in your testimony, can you talk about the progress that's been made with the areas that are targeted for the assistance to firefighters and grant programs? can you comment about how these programs have really contributed to addressing the challenges that are faced by our local fire service? >> yes i'd be glad to. thank you. we have conducted three needs assessments of surveys of the fire service. as the second and third we accompanied with a matching analysis, looking at how the needs had been affected by the grass, people got in the years before the survey was conducted. what we found was that the particular types of needs that were especially targeted by the afg and safer grants tended to show the biggest improvements over the 10 years between the first and last. these improvements were all sizes of communities from the big cities to the small rural volunteer fire department areas that mr. hall was talking about. so, what we got was the programs, the grants are very well targeted. they are very effective. the only limit on the degree of improvement in need we've seen is that there's limited funding. they have accomplished as much as could have been expected given the amount of the grants that were out there, and so too is the roadmap was fairly clear. if you want to get these needs really far down, you need to come as the other speakers have said, maintain the funding and if possible increase the funding for these grants. another thing that we looked at in the grants ogrin, and a needs assessment, was training. do they have the training, do they have the certification for various different tasks. and here again, we saw improvements in need but still very great needs. and this ties back to the outreach programs that are being conducted from the academy. >> thank you. now, in my state of oregon we pride ourselves in sustainability and green building, so when someone mentioned the rooftop covered with photovoltaic cells, that sounded like back on. would you talk a little bit about the work that is being done to make sure that the new methods and tactics are developed for fighting fires in green buildings? >> i think that was my statement that you are reacting to, congresswoman, thank you. it is an active project at nfpa that is in cooperation with the fire administration and with other key entities. to try to develop best practices, how should you a just your way of fighting a fire in order to identify that this particular hazard is there when you show up, and then to decide how you avoid shock hazards and other sorts of things in the course of fighting the fire. it's not only going very well in terms of producing results, but i think it's something of a role model project for how new hazards can be incorporated into the best practices of the fire service in general. >> thank you very much, and i yield back. thank you, mr. chairman. >> i now recognize the gentleman from illinois, mr. lipinski, for five minutes. >> thank you, mr. chairman. i think all the witnesses for the testimony. obviously, very critical issue here, talking about fire safety. end of the investment of both mr. o'connor and mr. mitchell, you both highlight one area in which you think the usfa can do more in training. and mr. o'connor, you specifically mentioned that usfa has been slow to input congresses recommendations, that the usfa partner with organizations and establish fire training programs. so want to ask mr. o'connor, can you tell me, tell us more about iaff training programs and how they can can help the u.s. fire academy expand its reach? >> i think in all fairness to the academy, part of the issue is resources, we talked previously. but interview the national fire academy -- people were able to be in residence there and actually travel to emmitsburg. it's wonderful training. and the outreach of state training academies has been magnificent. but i think this committee and congress, or use authorization, recognize there's other opportunities. while we are very proud of the iaff i wouldn't limited to simply our organization. there are a lot of folks throughout the fire service organization representing firefighters of all types that have training programs. for example, one i know best is the iaff. we have several grant programs funded through the departmen def energy, department of homeland security, and department of transportation that are predicated on peer-to-peer training t. to essentially we have training programs that are certified to meet the standards and the approval of the fire academy and other sources of the fire service, but they're delivered the economically at the local level. meaning if there's a need for training course in hypothetically in towns in oregon we would find a structure that is already trained and certified in portland. their day job may be a firefighter in portland or bedford or somewhere else, but they would be dispatched to this area and basically only be compensated for the peers there actually turning. they are spread geographically across the nation so it's a very efficient and economical way of delivering the training. that country of instructors currently exists, and if we were contracted through some mechanism, be allowed that opportunity put these programs in the field, and can't i don't limit the simply to the ias of but it is a good model of training are especially effective because it's not just an academic study, it is an actual firefighter who may be an expert in hazmat response, training other firefighters in that discipline. so there's that natural respect of camaraderie and ditches a very good way of expanding training profiles and getting a curriculum in the field. >> thank you. i want to turn first my time over to the issue of fire grants, and in 2009, began in 2011 i help lead legislature to authorize the fire grant program. unfortunately neither of these initiatives have been passed into law. the reauthorization legislation would make these grants more accessible to fire departments across the country and bring stability to crucial source of funds for local fire authorities. dr. hall, in your testimony you speak to the importance of these grant programs and effects they had in our communities. can you comment on the importance of reauthorizing programs and the thoughts of proposed changes in the reauthorizing language? >> thank you, congressman. yes. we have considerable analysis which was done in association with our needs assessment surveys to demonstrate the good targeting and the effectiveness and cost-effectiveness of the grants programs in all kinds of different resource areas. we have made the results of those studies available to every member of congress and their staff and will be happy to discuss these things in detail at your discretion. i do not honestly have any suggestions or thoughts on the reauthorizing language. i know our washington, d.c. office would be more than happy to discuss that kind of detail with any of you and your staffs as you go forward. >> i appreciate that. hopefully, i will certainly continue to take advantage of that opportunity, hope my colleagues to also. and with that i would you back the remainder of my time spirit and now i'm going to open up to a second round for those who like to ask additional questions. i now recognize myself for five minutes. there's been a lot of discussion about resources. and i understand that over the course of a number different years, that the authorization level has been up to $79 for the usfa, and then the appropriations act again in much lower than that. i think in the 2013 house funding bill basically it provides $42.46 million, which is right about the same level the request from the president in his budget. i know that that's not the level that you would like, but i do think that this hearing has been very informative to see what the priorities of the usfa and how we can support your endeavors in very tough budgetary times. i think that providing an authorization level that is much higher than when really we can afford, i think is a little bit irresponsible, but i do want to continue to go down and see what priorities and what we can do to make sure that we are giving the support that's necessary, even though we might not be getting to the levels that you would like. so i did appreciate everybody's testimony. i want to go to chief critchley. chief mitchell was talking about how wildfires are becoming more significant threat. agenda, arizona is currently battling for wildfires in the central and eastern part of the state and we had the wallow fire last year, and we continue to see this. can you kind of give me some insight on why our wildfires becoming a more significant threat? is a forest management policies such as ensuring where keeping fuel loads low and trees and to a healthy level? or patterns of development because people moving closer to for us, or is it a combination of both? >> thank you. i would say it's a combination of both. i'm not, as well-versed on the fuels management program that they have but i can promise you that as we grow as a community, we are reaching out into areas that were never designed for fire trucks to get into to take care. so as we expand the size of our cities, or the movement out into the urban interface area, we just increase the number of buildings that are going to be hurt during a wild land fire. so i believe it is both, but primarily it's the way we are managing our growth. >> and chief mitchell, do you have any thoughts on why they are becoming more significant? >> again, i'm not as familiar with the fuel management part of it, although you know, we are engaged with another agency now, and studying fuel management and how fuels management versus phi response and prevention all interact. but coming up in the fire service in southern california, i know a large part of the problem was based upon more building and living in the interface zones. the lack of fire resistant construction in those areas and some of the other preventative and mitigation measures that could and should be enacted to prevent loss. >> okay, thank you. and dr. hall, it's been described in one of the usfa training challenges is reaching out to all firefighters across the country an increase of online class and distance training. has the nfpa perform any research to try to quantify the impact of training programs and as the nfpa to specifically measure the effectiveness of remote training? >> thank you, mr. chairman. the analysis that we have conducted is not at the level of detail. we have results that indicate that the training situation for the fire service has improved to a limited degree between the first of our needs assessment surveys and the more recent survey, but we have not been in a position to look at specific data about people reached or the efficiency of particular methods of delivery. >> okay. thank you very much. and i now recognize the ranking member, ms. edwards. >> thank you, mr. chairman, and thank you for this second round of questions. i want to go back to the issue of credentialing because i recognize that, you know, we have a lot of local fire departments, firefighting is essentially a local activity, but we also have a number of circumstances, particularly major disasters, where we are calling on one jurisdiction to support another jurisdiction. and for me, this is where the question of credentialing comes forward because i think it's really important for us to make sure that whomever is responding in what ever jurisdiction has the same capacities so that they kind of fit right into the program under able to respond appropriately. so, mr. o'connor, can you elaborate on the recommendation for credentialing and explain why you think it's important, and then if chief mitchell could comment on the status. because i think mr. o'connor, in your testimony, you indicated that there's some lagging because it's been in the hopper sends 2006. >> yes. i mean, this was something that was brought the day after 9/11 and hurricane katrina. you have articulated very well. i don't think anyone on the federal level wants to suggest to local committees what the level of fire could and should be or ought to be. that is up to a local community, recognize that we don't want to try to end thing with it. however, for those larger scale instance, whether it's flooding in the plains or hurricane coming ashore, a wildfire, whatever the incident is, you need an appropriate trained skilled responder to actually handle that type of the crisis. and throughout very many fire departments, as you know, i was a firefighter, structural firefighter, i don't have the training and wildland wildfire. so he would be useless to have -- so the point of this is to make sure that incident commanders and their son tide of clearinghouse or databasing, firefighters and departments are actually typecast so, you know, what training, what level of responders trained. it simply makes common sense. and i think everyone recognizes that. i also recognize that this was not specifically passed to the u.s. fire administration. it was also in the agency, but it's something that frankly is a responsibility of the incident command and the people responded. and it's why it is so important that it is follow through. >> administrator mitchell then, if you could comment about what the status is and sort of where we're moving on the. i mean, if this is something we've been considering since 2006, and my recollection is, in the 9/11 disaster where you have people who, understandably department who wanted to respond in a very unique fire situation, you could see him making sure that you the right people responding, could be lifesaving. >> yes. i worked in a very active system myself for many years. we did recognize how important it is that people are able to work together at the essential levels for their own safety and the to be effective. i have been advised that the fire administration, fire academy, did a credentialing review and took input from the fire service and made a recommendation in terms of fema. i would have to, back in 2005 or six. i would have to get back to you on what that status is since our recommendation went forward. >> that would be extreme helpful. i mean, it's 2012, and jenna, it would seem to me that if a recommendation has been made from the experts, then there should be some way that that gets expedited for considerati consideration, you know, six years is a good way to expedite things. thank you. and then lastly, chief mitchell, in the authorizing bill, there's a requirement for the secretary of homeland security in consultation with the fire administration to establish some fire service position at the national operations center, and i've been given to understand that that is not a full-time position with full-time status. can you update us on that requirement and now it is being fulfilled by the fire administration? >> that is correct. it was not approved as 24/7 as full-time combat as a full-time position for person to deal with the transfer of data and information. that position has been approved and is presently being advertised for. so we're in the process of filling that position. >> and is it important that there be sort of a concerted person designated from the fire administration representing the fire services at the national operations center? >> yes. we believe that would be extreme helpful, as far as when he is a full-time, are we talking about around the clock. given the resource, that's probably not the most efficient way. if the threat level raised to a point, we would handle it as we do other positions at that time and staff of around the clock, based on conditions. but on a day-to-day basis it would be a full-time equivalent positions. >> thank you very much. and thanks to all the witnesses. >> i'd like to thank all the witnesses for their valuable testimony and the members for the question. the members of the subcommittee may have additional questions for the witnesses and will ask you to respond to those in writing. the record will remain open for two weeks for additional comments and statements from members. the witnesses are excuse. thank you all for coming. this hearing is now adjourned. [inaudible conversations] >> the u.s. senate meets this afternoon at 2 p.m. eastern. senator will consider a bill will consider a bill to continue the food and drug administration user the. they would pay for the fda's review of prescription drugs and medical devices. also today an appeals court judicial nomination and we will have live coverage of today's debate here on c-span2. over on c-span they will be live at noon eastern with a discussion of the navy's combat fleet and new ships coming into the plea. the navy undersecretary will be there along with government oversight officials. >> president obama is in chicago today for the final day of meetings with nato leaders. their discussion is centered on ending the afghanistan war. afghan forces are to take the lead in combat mission starting next year while nato transitions to a supporting role. president obama will hold a closing news conference in chicago. that's at 4:30 p.m. eastern, and you can watch live coverage on c-span. >> consumers are frustrated right now that their mobile devices are smart phones are working so slowly spinning commissioner robert mcdowell on spectrum auction. the universal service fund, competition for wireless space and two new commissioners tonight at 8 p.m. eastern on "the communicators" on c-span2. >> social security administrator commissioner michael astrue says the backlog in disability claims will continue if congress keeps cutting back on the agency's budget. he said disability claims have risen with the recession and more people are claiming mental illness. the commission testified before the senate finance committee for about an hour and 20 minutes. >> come to order. president kennedy once said, the nation's strength lies in the well being of its people. no federal program touches more american lives and benefits more and i can families than social security. next year the so security administration will pay benefits to almost 60 million americans. today, we will examine the agency's performance living benefits to workers and their families, and its role saving taxpayer dollars. this is not a hearing about the social security resolving. we'll hear from the commission of a social security administration, michael astor. commissioner astrue, during your confirmation before this committee in 2007, you can do to reduce its ability rings backlog. today, we will evaluate the results. at the beginning of last year, more than 771,000 people were waiting for a hearing. this is higher than when you started your turn. i expect to hear why the backlog grew and what the agency is doing to address it. michael klosson who lives in my hometown in helena, montana, needs this backlog to be fixed. he has spent years trying to work through the red tape. mike is a 55 year old army veteran, and his service didn't and when he retired from the military. my colleges with the american wages come with the disabled american veterans, helping other veterans find transportations to hospitals across montana. but his health problems make it tough for him to volunteer to do other work. during his military training exercise years ago, a tank next to him accidentally fired. mike's act broke in the accident. ever since, have suffered from chronic back pain. might work in heating and plumbing before joining the military. he was working as an employment specialist with the montana -- job serving 2004 when the disabilities became too much to bear. he had to leave his job. he applied for benefits shortly thereafter. mike has waited since 2005 for his benefits. seven years. he has settled between various security offices and his paperwork has gotten lost. mike and his wife had to sell their home in butte, montana, to be closer to his hospital in helena. they couldn't take the physical demands and the cost of traveling. his wife was his caregiver went back to work to make ends meet. things have been a struggle for them. financial hardship means are unable to visit their children and their grandchildren. and with many americans planning their retirement for financial futures, mike is tight. mike stepped up to volunteer to serve his country, but now that she was on the other foot, he is waiting for his country to serve him. fortunately, we are seeing one side of the progress in the social security administration but it doesn't take us long for people to make a decision on their claim. at the end of 2008, it took 514 days, almost a year and a half, and 2011, a few years later, it took 360 days, about a year. this is substantial progress, but still too long. mr. astrue, you set a goal of 270 days by the end of fiscal year 2013. together, we need to meet this goal. and while the agency has received 50% more retirement obligations since 2001, applications effective social star general, they are workers to deal with the increased workload. these challenges have been compounded because the agency's budget has remained flat during the last three years. the social security administration needs an adequate budget to fix the disability backlog and root out improper payments. for fiscal year 2013, the president has asked for 11 points $76 billion. this is 307 billion more than last year, most of which is dedicated to reducing improper payments, thereby improving the long-term outlook of social security. every dollar spent to root out improper payments saves six to $10 in the long run. those are dollars that will help the trust fund. unfortunately congress to provide full funding for these efforts in fiscal 2012. doing so would have saved taxpayers more than $800 million. if the congress, follow the president's recommendation it would have saved the trust fund $800 million to social security retirees would have $800 million more cushion in the trust fund. we all talk about saving social security. here's a great return, about one and six, 110. i don't no if we can get much better than that. still, congress is very shortsighted and did not recognize the real payout here for some reason. don't know why. we can't afford to repeat this mistake. failing to fully fund the program's integrity is penny wise and pound focus. so as to invest, it reduced the disability backlog. to do that, we could do both. let's ensure that americans like michael is not stuck waiting for benefits they earned and let us ensure that the social star program is making our program stronger by improving america's well being. senator hatch? >> thank you, mr. chairman. i want to thank you for scheduling this hearing and a junior in welcoming commissioner astrue. the social security administration oversees numerous programs and is responsible for stewardship of significant taxpayer resources. we are all interested in hearing from the commissioner about his stewardship of those resources, his plans for the future, and his strategies for confronting existing and ongoing challenges facing social security's programs. a few short weeks ago, we received a reminder of some of the challenges facing social security's finances in the annual report of the trustees. according to the report, the combined old-age and survivors insurance and disability insurance trust funds within social security are projected to be exhausted in 2033, three years sooner than in the previous year's report. the trustees identify that as the system is currently structured, social security beneficiaries face benefit cuts of as much as 25% in 2033, with further cuts thereafter. to state things simply, current promises embedded in social security cannot be sustained given the system's existing structure. worse yet, the disability insurance trust fund is projected to become exhausted in 2016, less than four years from now, and two years earlier than estimated just one year ago. absent changes, disabled workers will very soon face the real threat of a 21% benefit cut in 2016. and with the recent explosive growth in the ranks of disability insurance benefit recipients, far outpacing growth in the general working population, 2016 might be a rosy outlook in terms of when the disability trust fund actually becomes exhausted. benefit payments in the disability insurance program have increased by a remarkable 134% since 2000. following the fiscal cliff that we face at the end of this year, we have a solvency cliff in 2016 for the disability insurance program and then another solvency cliff for the social security retirement program. yet in the face of these known dangers, we continue to kick the can down the road, instead of addressing the known problems. we should not act like thelma and louise when it comes to social security and our economy by driving them off a cliff into an abyss of insolvency and economic decline. inaction is irresponsible. as the president remarked recently in advocating more tax-and-spend policies, the fact that this is an election year is not an excuse for inaction. unfortunately, i am not aware of any plans by the administration to tackle the looming exhaustion of the disability insurance trust fund or the general unsustainability of social security. as far as social security is concerned, it appears that this being an election year is the administration's reason for inaction and is just another excuse for them to kick the can down the road once again. so many tax provisions expire at the end of this year that a dangerous fiscal cliff has formed. by not acting now, we are just stepping on the accelerator even as we are already perilously close to the cliff. inaction for the rest of this year only invites careless and hasty decision making, which leads to bad policy. i urge the administration to work with congress on the mountainous to-do list of expiring tax provisions and unsustainable entitlement promises in the interest of sound policymaking, certainty, and the provision of an economic environment fertile for growth in jobs and the economy generally. there is no reason to delay efforts that will place the programs in social security on a sustainable financial path. as virtually everyone acknowledges, the sooner we address the issue, the better. mr. chairman, i appreciate you holding this hearing. commissioner astrue, i know you have an insurmountable job in many ways, and we have great respect for you. i want to thank you for your service and for joining us today. i look forward to hearing about your budget, your challenges, and your plans for the social security administration. we appreciate you coming. >> thank you very much senator. mr. astrue, i would just like to go through some numbers and see if they are accurate. there's some talk about -- sorry. do you want to talk? [laughter] >> if it pleases the committee spent i'm so excited to ask you questions. spent well, if we can continue, if i will be permitted, i understand i have a couple of minutes of grays on the standard five minute. i'm the only witness they but i will try to make it as quick and the as i possibly can. >> i apologize spent chairman baucus -- >> i want to introduce you. >> i'm sorry. [laughter] >> we have a very distinguished guests today. [laughter] and that habit have you introduced them. >> commission of social city, the honorable michael astrue. we are very much look forward to testimony, commissioner. we have no new server years, you served in several capacities and then to work, very, very proud of you. you perform admirably. take a deep conviction, conscientious catholic and we appreciate your work. so why don't you proceed. you do have a little more than two minutes. >> thank you -- >> and your statement will automatically be in the record. >> chairman baucus, ranking member hatch, members of the committee, thank you for this opportunity to discuss the resources we need to continue to providing outstanding public service. as we do so, we must always remember that we must maintain our responsibility to save taxpayer dollars. in every fiscal year through 1994, through 2007, congress has appropriate less money than the president requested. the same time our workload steadily increased because the nation's population was growing and the baby boom generation entered its this velvet chrome years before filing for retirement. congress has also added dozens of new statutory responsibilities without simplifying the complexity of the social security act, which has grown over 77 years. out employees fortitude has allowed us to keep up to some extent, but we have started to lose ground. from 2001-2007, the agency responded to budget cuts by dramatic reducing its program and integrity work in extremely poor choice from the taxpayers perspective. as you mention in your opening comments, continuing disability reviews say that taxpayers substantial dollars for every administrative dollar spent. the agency also responded to budget cuts but under investing in its hearing of appeals staff. aas a result, delays are visible hearings steadily worsened and became a national disgrace. not only was government failing its citizens, it was also spending more administrative money per claim to eventually handle these claims that were taking too long. when i start as commissioner, the first issue of this committee raise was a hearing backlog. at the time it took on average more than 500 days or person to get a hearing. we all agreed that had to change. i made the case we need to move in new directions and you understood it would only be possible with your support. the investments that you may to produce substantial dividends. despite huge increase in this build applications caused by the deepest recession since the great depression, we have weathered a storm that produced over 600,000 more applications each year that our actuaries projected before the recession. >> we have capped the average wage for an initial decision steady, and the original cause with your new compassion allowance and quick disability determination processes. severely disabled applicants who often waited years for a decision in the past now get one many an average of 10-14 days. five years ago you would probably get a busy signal when you called the field office. now the busy rate is less than 10%. last year we had the lowest waits in busy rates ever on our 800 telephone number. we've also made progress in policy. we have updated medical rules that had been out of date for decades, and we have started the long, slow process of overhauling our main vocational tool, the dictionary of occupational titles, which the department of lay or boar largely stopped updating in the late '70s. early in my tenure i was stunned to learn that the office responsible for notices had been disbanded. we mail 350 million notices each year to the american public. many of these important communications were inaccurate and poorly written. we've been rewriting our notices systematically in plain language to make it easier for people to understand our actions and their responsibilities. program integrity work while still not funded at the levels requested, is up substantially. we are also taking advantage of technology. we redesigned our online services which had been invaluable in helping us to keep up with recession-related work. we have four of the five most highly-rated electronic services in the federal government, and we are the only federal agency widely offering online services in spanish. for the first time ever, we have a backup for our national computer center, and last month we finally had the ground-breaking ceremony for the state of the art replacement facility. the new building, by the way, will be constructed for about $75 million less than the original cost that we and the congress had projected. none of these accomplishments would be possible without our employees. we've achieved an average productivity increase of 4% a year for the past phi years and -- five years and a higher rate this year so far. a remarkable achievement that very few organizations, public or private, can match. and we all owe them our gratitude for their work on the front lines. i'm concerned that despite their hard work we are seeing signs that we will soon be moving backwards for most of our key service goals n. fiscal years 2011 and 2012, the difference between the president's budget and our appropriation was greater than in any other year of the previous two decades. also last year congress rescinded 275 million from our i.t. carryover funding which will greatly damage our efforts to maintain our productivity increases through i.t. innovation. we are starting to see the consequences of these decisions. our progress in addressing our hearings backlog, for example, is not happening as quickly as the public deserves. we need your support for the president's fy-2013 budget request as well as a timely and adequate supply of well qualified judges from opm if we have to achieve our goal of an average processing time of 270 days by the end of next year. few people realize that a rapidly-increasing percentage of our work results from our verification role for other federal, state and local entities. for example, the number of people who visited our offices to verify their benefits for a third party has increased by 46% since 2007. last year we conducted 1.4 billion, billion, verifications for programs such as e-verify, voter registration, driver's licenses and health care programs. while most of these verification occurred cheaply and automatically, a small but increasing number result in nonmatches that strain the resources of our rapidly-shrinking field offices. many members of congress have written about the importance of our service in local communities. unfortunately, budget cuts do not allow us to employ the staff necessary to meet all their expectations. by the end of this fiscal year, we'll have lost 6500 federal and state employees in the past two years. and as you well know, attrition by hiring freeze does not occur evenly, and many of our smaller, rural offices have been hit harder than the average office. much of the progress we have made in the past five years could vanish if we keep losing fast at in this rate and in this fashion. our accomplishments demonstrate the direct correlation between funding and service. i appreciate this opportunity to explain the wonderful work that the men and women of the social social security administration perform under enormous and increasing stress. they need your continued support as reflected in the president's fiscal year 2013 budget request to continue to serve the american people in the way that you and i expect. be happy to answer any questions you may have. >> thank you. thank you, mr. astrue. i'd like to indicate what the director of montana thinks, and that is >> increasing case law. so, i'd like to ask you, you know, your thoughts about that. we clearly want to see disability hearings backlog improved, what you're all working on, but the other efforts off to the side. could you just comment on what happened to your agency if we don't get the president's budget request? again, to -- we expect to start dropping below employees of five years ago before terribly long. and the retirements and the attrition do not happen evenly around the organization. so not only do we have the problem that we have fewer people to do the work, we have the wrong people in the wrong places. and with all the restrictions of government, it's not easy to move people and move work in the way that allows for the optimal result. so we expect that we will continue to be contracting the number of field offices that we have. we've already closed virtually all the contact stations. we've closed most of the remote hearing offices for odar. we expect that we will start having backlogs at the dds level that we haven't had before, that people will be waiting longer for services in field offices. and i think there's a real question as to whether we're going to hit the goal at the end of next year. we'd been making great progress with them. congress wanted to check and ask gao to do a crystal ball analysis, and we did well with that a few years ago. i think it's a question of will at this point. if congress wants us to make that goal, i think if you support us adequately, it'd be close. now, we lost most of our margin of error last year. we could still hit it, i think, from congress. but if we don't get support for the president's budget, the chances we'll hit the 270 on time are almost nonexistent. >> could you explain it takes a while to train new people to do the work? this is not work -- the man or woman that walks in the office the first day and say, here, you know, here's your job. >> are yes, that's exactly right. i think about every three years the supreme court complains about the complexity of the social security act, and there's some memorable quotes about that. we expect that for most of our front line workers whether they're in the ddss in montana, whether they're in the field office, that the work is so complicated that they contribute relatively little in their first year of work. it's mostly learning. and, in fact, they can be a real drain on productivity because somebody who knows how to do the work has to take the time to make sure that the person's learning, that the work is proper. so it's really you start contributing in your second year, and you're probably not in most cases reasonably productive from an operations point of view until after the second year. it's a particular problem with the ddss because the salary scales in the states are very low, and the turnover is very high. our turnover attrition rate tends to be around 3% for the federal employees, it tends to be 9-10% in the state employees. we actually sometimes, we actually did this in utah with senator hatch's guidance and support a couple years ago. the attrition rate was in, i think, the 30s in utah, and we worked with the state to reclassify the jobs so we could actually hold on to the employees who were doing the front line work. >> will you mentioned that most of your temporary sites are being closed. it's my understanding that you plan to offer a permanent remote site in great falls, montana, is that correct? >> yes, that's correct. we, um, had been planning to -- i think the issue had been working with gsa to find an appropriate site and an appropriate cost. and i think we just, actually, we had a letter from senator tester that i think we just responded to yesterday or the day before confirming that that will be, that will be coming. >> yeah. and for those who aren't familiar with the distances in montana, that is very significant because otherwise people, the great falls area and even north of great falls otherwise had to go all the way to billings, montana? that's many, many hours' drive. >> yes. >> it's a long, long, long way. >> i understand. [laughter] >> so it makes a big difference. we deeply appreciate you recognizing the remote nature of our state so people with disability don't have to drive quite as far. i mean, that's a long -- a big burden to put on people. >> and what that is will be a permanent video link. and i think particularly for those of you in the rural states, we need your support on video. we are not going to have the staff to do everything face to face the way that we could 30 years ago. the quality of the video is very high. you can actually see the water mark on a driver's license on the video well enough to use that for verification purposes on a remote location. also for hearings, and i'm frustrated that not a lot of attorneys are not taking us up on this yet, they can now do video hearings from the comfort of their own offices with a relatively small investment in if equipment. it would make us much more efficient, it would allow us to spend less on bricks and mortars if if more of the attorneys representing claimants would take us up now on the offer that they can run the hearings by video from their offices. >> is there any incentive you could provide? >> not under the current statute, but i think that's a very fine question, mr. chairman. >> thank you. senator hatch? >> well, thank you, mr. chairman. commissioner, there have been reports of problems in social security's disability programs, as you've outlined. some relate to possibly careless or even corrupt benefit grants made by administrative law judges, and some relate to attorneys representing claimants in the appeals process. now, it seems to me that the stakes are pretty large. dr. mark who chef sky, currently a member of the social security oversight board, recently presented evidence that low-claim denial rates who decide on many cases, quote, have a fixed tendency over time to rarely deny claims, unquote, and calculated that if remedies were put in place to shore up the claims process, we could save tens of billions of dollars. of course, those savings could then be used to provide benefits for the truly disabled and would help with the nearly exhaustive disability insurance trust fund. let me be clear, disabled workers who are eligible for benefits that have bona fide disabilities are fully entitled to what the di program provides. however, there seems to be evidence suggesting that some of the decision-making could be leading to benefits being granted in cases where there's no bona fide disability. in those cases, they drain taxpayer resources away from where they were intended and rob the di trust fund of resources that should be going to the truly disabled. no american worker and no disabled worker likes it when someone defrauds the system and takes resources intended for those truly in need. and it's truly not fair, and tens of billions of dollars may be at stake here. now, mr. commissioner, i know that you're working to address problems in the di system, but i wonder if you could comment on where you believe further work needs to be done in addition to what you've said here, and what are you doing to enhance the integrity of the di claims process? >> yes. no, that's a very fine question, mr. hatch. i speak with a lot of well-motivated people that have a philosophical feeling that we should be granting a lot more benefits or a lot fewer benefits. i don't view that as my goal. what i view as my goal is to have our judges call it as squarely as possible on the basis of the statutes that you and the congress have written. and i think that what gives me cause for concern are the judges who, in my opinion out of arrogance or ideology, take it amongs to ignore the law -- among themselves to ignore the law that you have written and that they're pledged to uphold and make their own judgments either to be a robin hood or to be a scrooge. if you look at the statistics on the outliers, we have improved senately in the last five -- significantly in the last five years. we've done that with better training of the new judges, we've done that with more counseling. we've also been more active in discipline, and we have not actively disciplined a judge for not adhering to the law yet. but the same arrogance that leads a judge to engage in that kind of behavior also usually allows them to engage in other kinds of inappropriate behavior. so we've removed more judges for conduct on my watch than in all the previous commissioners combined. that has started to have a beneficial effect. but i don't want to suggest to you, senator hatch, that we are where we should be, and the number of judges who are basically thumbing their nose at you, the congress, is still higher than it should be. it should be zero. i think that my authority in that area is gray. this was a hearing on the house side i would commend the transcript of that to you, joint between ways and means and judiciary. i think if you're concerned about the issue, i'm more than willing and the agency's more than willing to take it on, but i think you need to look at how to strengthen the agency's authority while still respecting the independence of the judiciary. >> well, thank you. mr. commissioner, the disability insurance program dispersed close to $130 billion of benefit payments in 2011, and it's the fastest growing of all of our entitlement programs. in just over a decade, aggregate payments in the di program have risen by almost 135%. now, it doesn't take a rocket scientist to recognize this type of growth is unsustainable. according to the social security trustees, the di trust fund will be exhausted by 2016, and beneficiaries will face benefit cuts of 21%. now, some look back to the greenspan commission and suggest that we solve the problem by simply pouring funds from the oasi trust fund into the di trust fund, and yet that simply robs peter to pay paul, in my opinion, and does not solve any of the structural problems. now, one cause of the rapid expansion of di costs is that some researchers have pointed to stems from 1984 reforms to di screening that led to rapid growth in the recipients suffering from back pain and mental illness. two researchers affiliate with the the national bureau of economic research have also written that, quote, the di screening procedure put in place by congress hims to a significant extent on an applicant's employment causing the program to function much like a long-term unemployment insurance program for the unemployable, unquote. now, of course, anyone who is eligible and has a bona fide disability is entitled to di benefits, but di benefits paid to anyone who is not truly disabled simply takes resources away there those who are truly disabled. now, i have, i think my time is up. can i ask these two questions? i have two questions related to the di program. first, do you agree that the sometimes-difficult-to-diagnose conditions related to back pain and mental illness accounts for some of the most rapid expansion of the di beneficiary population, and secondly, to what extent do the opinions of those makes -- making di benefit conditions determine eligibility for di benefits? that is, has di become an unemployment benefit provider of last resort? >> um, senator hatch, let me say i think that, um, di is a rapidly-growing, um, program. i think that there have been some analyses i've seen recently that misunderstand the nature of that. most of that has been predictable, um, and has been predicted by the actuaries for a long time. and if you simply compare the growth in di to the growth in many population, um, you would think, okay, the program is growing faster than it should. but when you factor in people like me at 25 who are perfectly healthy, not so much at 55 that the actuaries say that almost all the growth in di is consistent with what they've been predicting for a long time based on the baby boom going through its disability-prone years. having said that, if you look at on a more granular basis some of the causes of growth, i certainly say with mental illness you're correct, that we as a society are diagnosing mental illness more frequently, we are prescribing treatments for mental illness much more frequently than in the past is certainly a significant factor in the growth. i'm not sure that the back pain and muscular damage is as much of a factor, but we'll go back and give you information on that for the record. in terms of being a back-up employer for unemployment, other nations -- england, for instance, quite consciously did that, regretted it and is pushing back in the other direction. i think that there's a fair amount of evidence from how the agency has handled cases during this recession to indicate that that's not true. i think that we're calling cases squarely for the most part exactly as we have been, but our allowance rates have dropped at the dds and odar level to the lowest in a long period of time. at odar the last few months it's a 50% allowance rate. we haven't seen that since i had my first job in the senate in 1978. the ddss, you have to go back to, i think, 1997 until you've seen an allowance rate as low. and i don't think it's because we've become tougher, we've changed our standard. but what happens during recessions is that economically-desperate people alie. and the vast majority of them -- apply. and the vast majority of them get rejected because we adhere to the statutory standard. we don't want to -- we don't feel that we're supposed to turn it into exactly what you're concerned about. now, when you have 650,000 more applications in a year, are we perfect? are there some people that slid through during the recession, were allowed for benefits who probably shouldn't have been? probably some. but i think for the most part, um, we've administered the program with integrity and tried to do exactly what the congress has told us to do and not take it upon ourselves to move the standard, move the needle in one direction or the other. >> thank you very much. senator carden. >> thank you, appreciate it. >> you bet. >> mr. chairman, first of all, thank you for this hearing, and commissioner astrue, it's a pleasure to have you before the committee. i want to acknowledge the improvements that i've seen in regards to the annual earnings statement's availability to recipients. we, i now understand that there is a secured web site where the information that would be contained in the mailed version of the earnings, annual earnings statement's available. i've communicated with you the importance of this document for people knowing and projecting where their retirement income will be to look at the accuracy of the information, to look at their eligibility. and i also understand you do have, if budget is proved, resources to mail out to individuals, a hard copy. and i just encourage you to continue to make that information available as easily as possible. it's very important for people to know where they are in the social security system. i want to talk about the issue that you've raised. i've had a chance, as you know, to visit the work force in maryland. these are dedicated people working very hard. you pointed out their productivity's up 4% a year now consistently. you've had 6500 fewer workers, and the numbers are increasing every day. the interesting point you raise is that as we lose a person through retirement, it takes you a period of time to get a person trained to do that work. and you said as much as a year could be lost in productivity. >> yes. >> as a result of losing people. now, we've gone through two years of the pay freeze. we have a projected increase that'll be less than what would be normally required. we have a tax on retirement which has to be an impact. i when your workers look at what we are considering here in changing the retirement rules, seems to me it just encourages some people who have the ability to retire to say why am i putting up with this? so is this a real concern, that we're losing people that otherwise might be staying in public service and providing the services so that disability determinations can be done more timely because people just saying, what are we doing here? there's a tax coming all the time. >> yeah, no, i would say i'm close to panic about holding on to our people because they're the ones that do the work. um, we'd be nothing without them, and it is very hard to find the right people and to train them properly and. and really for a lot of what we do, you often need five or ten years of experience to do it well. so i work very hard to try to hold on -- i'll tell you another factor for so many people on our front line that's scary, even in a tight budget we've invested a lot more in the physical security in our offices. i read every violence report, um, that comes in to the agency, and that wasn't a big deal five years ago. i think there were only about 500 attacks or serious threats of assault. i think it's 2500 this year, and as you can see with the recession, they -- the intensity of the incidents got worse. and i think that it's easy in a lot of government agencies to be insulated from that. most of our people are out on the front line looking face to face with severely disturbed people on a regular basis. and that tension during the recession where people have been more violent, people have been more anti-government, there have been more, a lot more threats of violence, that's a real factor in losing people too. that's taking a toll on people on the front line. and that's why we've invested even in tight budget more in security than we have in the past. >> yeah, i know we're going to have disagreements, legitimate disagreements on budget priorities and how we need to proceed to balance the federal budget, but i think we all want to make sure that our federal work force is safe. >> yeah. >> that it has the support it needs. i don't know of a member of the senate who doesn't believe that the benefit bees provided by the -- benefits provided by the social security administration is vital to our country. i don't know of a member who doesn't want to see the services done in a more timely way, in a more professional way. and when you have an agency that has an increased productivity at the level that you have been able to achieve, that is being asked to do more with less, i think the least we can do is to make sure that we provide the type of support you need in order to get the job done. >> thank you. >> and certainly, i think our language here at times has been counterproductive in keeping some of our best in public service. thank you, mr. chairman. >> thank you, senator. senator grassley. >> thank you, mr. chairman, and thank you, mr. astrue, for your work. following a little bit on the last conversation you had with senator hatch but asking a little different direction. you made some reference in your opening statement about the online application has helped, quote, dole with the additional -- deal with the additional economy-driven claims. this raises a question of whether disability insurance program has become an alternative unemployment benefit. those receiving benefits who are not disabled slow down the agency's response to those who are disabled. and they obviously contribute to the trust fund insolvency problem. two specific questions. why should the economy have a significant impact on the number of claims? in other words, people shouldn't be filing claims because the economy's bad, they file claims because they think they're disabled. and then secondly, what is the total number of applications for fiscal year 2011, and how many of those were not disapproved? -- or not approved? >> senator, so there has been a fairly substantial body of economic research over the years that shows -- people who are on the margins, who decide to take the chance. and there is, you know, as much as we try to make this as black and white as possible, there is a random element. these are human beings often making difficult calls. and is so people decide to take the chance. now, typically what should happen and what does happen in most cases is that most of those claims are rejected. but we don't stop people from applying. so it's not just this recession. if you go back historically, for instance, looking at the early '80s and other periods of high recession, the di workload goes up. i'll give you the precise record, numbers for the record, but 2011 we had somewhere between 3.2 and 3.3 million applications, if i remember correctly. at the initial level, we allowed about 34%, but let me just double check and make sure -- i'm very close, and we'll provide the precise number for the record. but let me, let me also, i think, respond to what you and senator hatch are trying to get at in a way. there are, if you're concerned about the system not being tight enough, there are some things that i think this committee should consider looking at. um, over time i think the courts out of sympathy for claimants have expanded statutory language beyond your intent, and in particular we have inconsistent rulings in the circuits on the treating physician rule which is critical to a lot of our cases. and in the ninth circuit, for instance, i believe it's particularly broad. they can't all be right, and it is potentially a way of blowing open the system and allowing cases that shouldn't be allowed if that standard, um, is not consistent with what i believe is congress' original intelligent. that's an area that i think is looking at. the area of what constitutes improvement on continuing disability reviews. court, i think, hold us to a higher standard than what congress originally intended. and also the return to work area, i think, is important. i think that as admirably intend ed as ticket to work was, i think it's been a disappointment in terms of its outcome. it's not, according to the actuaries, cost effective yet. and i think part of the reason for that is that congress has every five to ten years layered on more work incentives. it is so complex that i think it overwhelms people who even do want to come back to work. it's why we've up until recently congress has authorized what we call wipas, really largely to explain to people how to return to work. and that's a program that hasn't been reauthorized, and we think that we should. although some day i think it would be better to simply say, let's simplify the program. and in general what i would say is i know the way the budget trends are going. you know, we can't continue to do business as usual. what i would plead with the committee to consider doing is if you can't provide more money, let's look at ways to simplify the statutes, simplify our responsibilities. i think in sometimes trying to get equity and a lot of policy perfections, we've introduced complexity that has had unintended, negative consequences for the public. so i think working on legislative simplification generally would be a very positive way for us to go. >> i have one question i'm going to submit for answer in writing. thank you. >> senator nelson. >> good morning, mr. astrue. i want to follow up on the question of publishing the names and social security numbers of deceased people that you and i have talked about. but, mr. chairman, let me set the table. what is happening is we have a new kind of crime. it is not a crime with a gun or a knife or a crowbar, it is the use of a laptop once the social security numbers -- particularly of deceased people -- have been acquired, which is 34eurbed by social security -- published by social security, they file in the name of the deceased or in the case of a deceased child, most recently this morning's news out of memphis, a deceased child that lost a four-year battle with cancer. the name was published, the social security was published, the child's social security number was used as a dependent on a false tax return asking for a refund. and what is happening in communities like tampa and orlando, street crime, drugs, thefts, burglaries are going down because it's so easy for the criminals to get all of this money from income tax refunds because they've gotten somebody's social security number. and one of the sources as pointed out by this morning's news from memphis is deceased social security being published by social security. so when i talked to the, mr. astrue, about this, he said he has a lawsuit is settlement that requires under foia, the freedom of information act, that these numbers have to be published. and he says that we can only change this by statute. well, of course, i've filed the statute, but in the meantime the criminals are having a field day. now, i disagree with mr. astrue, and i want to bring to his attention some change facts. in the first place, he's operating with legal counsel on the basis of a lawsuit that was settled in the 1980, and the lawsuit was settled under foia just for the names and social security numbers. and it was to be published once a year. he publishes names, social security numbers and other information every day. that's a big difference. and i would ask you to consider that. you publish their address, you publish their date of death, you publish probably their date of birth, a whole set of information that was not required by the original lawsuit in 1980. mr. chairman, i would also bring to the committee's attention that since 1980 there have been a lot of cases that have found that the deceased has a privacy interest. and let me give you one that i have some familiarity with, because as you know after we returned to earth on the 24th flight of the space shuttle, ten days later challenger launches. and, of course, through foia people were trying to get all kinds of information about the astronauts. and that case ruled that the victims have a privacy interest that can be protected. so, mr. astrue, i would ask with this additional information would you, please, consider until we can pass the statute changing the law that you do not have to publish all of this information and do so on a daily basis which makes it so easy for the criminals to get their hands on it and do this new type of crime that is ripping off millions and millions of dollars of american taxpayers? and furthermore, would you consider that you each under the current -- even under the current lawsuit settlement could publish the names and only the last four digits which would then prohibit the criminals from carrying out this highly new kind of effective crime? >> so, senator nelson, you and i have talked about this personally, and we're just in disagreement on the law. and with all due respect, this is something i've looked at extremely carefully. i'm a former agency general counsel, i'm a former white house foia privacy act -- so this is an area of the law that i know something about. you in the congress have set the statutory times deadlines for disclosure under the privacy act and the freedom of information act with some severe penalties for noncompliance under the privacy act. so, no, i can't just sort of release them every year because you and the congress have decided that i can't do that. um, i also, um, as we've discussed before, i don't think that we have statutory authority to withhold that information. you need -- there's a strong presumption of release under those statutes. you need an exemption. i don't believe -- the challenger case is the only case on the other side. i don't believe that the challenger case has broad application. no court since the challenger case has applied or broadened that exception, um, in this way, so i don't believe that that's available to me. but even if i were wrong on that, as a practical matter you have to understand that the carter administration settled this case under a judicial decree in 1980. i can't just go back and thumb my nose at a federal court order. i'd have to, first of all, get the department of justice to challenge it which i don't believe that they would because they have no basis for going back and reopening it which is why they support the legislation that the administration has proposed that is somewhat similar to yours, and then it would probably be a four-year process to get a definitive decision even if justice department were to do that. so i don't think it's appropriate, i don't think it's practical, and i think what has to happen is the congress has to act. um, and i think that this is one of those rare opportunities where we can set aside a lot of the bipartisan problems in washington and work together in collaboration. the administration has a bill that's similar to the congressional bills. on the house, the lead has been on the republican side. chairman johnson of the ways and means committee. you and senator durbin have introduced bills here. i would say to you i think that this committee and the senate ought to take it up as a personal challenge in this the year to get this bill passed this year. i think this is one of the relatively few areas where i don't think there's a big disagreement on principle. so i would say this is the congress' responsibility, not the executive branch's to fix, and i would urge you to fix it as quickly as possible. >> in a normal year, mr. chairman, this would be the kind of bill that would be considered a motherhood bill. but the fact is that since it touches on taxes and social security in this political context of an election year for president, it's going to be very difficult. in the meantime, there is a public interest to be protected. and mr. astrue and i disagree on this, and i would merely ask you what you just said, if you would request of the justice department their interpretation so that if perhaps you might be wrong in your considered judgment as former legal counsel, that we might get some relief until we can pass this statute. mr. chairman, thank you very much. >> thank you, senator. clearly, this is a problem. and i think it would be worth our while to try to pick up this legislation. you have your legislation, the administration has a version. they sound not dissimilar, and both geared to resolve the same problem. and my view is we've got to try. i recognize some of the difficulties that occur this year. you don't get anything accomplished if you don't try, so let's see what we can do, work with the administration, with you, senator, maybe have a hearing on the subject because it's just, it's an outrage how people take advantage of, you know, the social security administration, take numbers and file for tax refunds. it's just an outrage, and let's see what we can do to stop this. >> and, mr. chairman, we've had two hearings on this in the subcommittee that i've had the privilege of chairing, so the record is complete. >> thank you. senator thune? >> thank you, mr. chairman, i want to thank commissioner astrue for being here to testify. social security's the single largest category of the budget, and the social security trustees recently released their annual report on the financial status of the program, and the report found social security can sustain full benefit payments for only three years than the last estimate. the social security disability insurance trust fund will be bankrupt by 2016 at the latest. if this happens, benefits will be automatically cut for current beneficiaries. the trustees' report underscores a need for meaningful entitlement reform to protect benefits for future generations which is why it's always so troubling troubling to find and hear about and learn of fraud in the program. we have to insure that the programs are operating efficiently. and i'd like to go back to something that senator hatch mentioned, and that is last december this "wall street journal" report of some potentially fraudulent practices on the part of law firms such as binder and binder representing claimants for disability benefits before the social security add manager, particularly in the appeals process where administrative law judges adjudicate claims. the report, which i would like to submit for the record, found that claimant representatives have in many be cases withheld evidence that the social security administration, from the social security administration that could prove their clients should not be eligible to receive disability benefits. and i, senator coburn has done a lot of work in this area, and i want to recognize his efforts in that regard in shedding light on the issue. but i'm disappointed to learn that the social security administration has refused to take action to address the allegations about this law firm and their material representations to the social security administration. i believe that full medical use of ability reviews must be performed on binder and binder claimants so that we can be sure that only eligible claimants qualify for ssdi benefits. ssa has a sufficient budget to do so, and in my view these reviews should be done not just on new allegations, but on prior allegations as well. and so my question is, is it not within your authority to prioritize the social security administration's program integrity functions within your existing budget to insure that there is a proper response to these claims? >> senator, i'm afraid i'm going to have to disagree with a number of the assumptions of your question. um, first of all, i'm familiar with "the wall street journal" article which was, we did not take no action. we did refer that to the office of the inspector general, and if you have questions about the progress of that, i would encourage you to talk to the inspector general. but that article was relatively thin in terms of the content of allegations. there really was not, in my opinion, very much there. it's also based in part on a misassumption that there is a requirement for all relevant medical evidence to be provided to the judge. and right now that's not the law. the previous two commissioners tried to make that the law, and my understanding is that they received a lot of opposition and not much support here in the congress for that. so, um, first of all, "the wall street journal" had it dead wrong on what the law was, and second, there wasn't much in the way of allegations. third, it would be unprecedented to go back and review all cases by a law firm on evidence anywhere near this thin. if you had proof of real fraud, and i have no information from the inspector general that suggests that we have that, then it would be totally unprecedented to do that. any court that would look at that would throw it all out immediately, it'd be an e enormous waste of the taxpayers' dollars for me to do that. >> do you have any indications yet, can you summarize for us any of the inspector general's findings? here's nothing --hat they've >> publicly? >> publicly reporteduch re than that, but certainly my expectation, again, senator, read that "wall street journal" article very carefully. you realize, first of all, that there is not a legal obligation to present every bit of evidence to the agency because our rules are not written way. there's a factual error underlying that whole article. past that, there's not very much specific in terms of evidence. there's unsupported here say -- hearsay. it may be true, but in order for us to take action, we have to have some proof in evidence, and "the wall street journal" certainly did not provide very much for thement inner general to go on. >> i'm sure we'll revisit that issue. last month there was a social security administration disability claims judge, judges, i should say, that were instructed no longer seek out information from social media web sites in deciding cases? >> yep. >> as you know, in our digital world with the internet including social media web sites, they provided an important tool for aljs to gather evidence about ssdi and ssi program applicants. and law enforcement in particular is using some of those mediums for investigative purposes. does the recent decision by the ssa work against program integrity? >> no, just to the contrary. first of all, you need to understand that to protect the public's privacy and to protect hundreds of millions of dollars, billions of dollars of investment in systems we have one of the toughest firewalls in the world. it's not just that we don't allow the judges to use facebook, none of our lows use facebook -- i can't get onto my computer and go facebook unless i specifically go and use a complicated work around from the i.t. people. so we do that to protect, first of all, the privacy of individuals and, second of all, to avoid horribly-damaging malware getting into the system that could cost hundreds of millions of dollars to fix, number one. number two, my opinion, i have to run a very tight, efficient operation to meet the public and congress' expectations. you allow broad social media time on government time, i think that becomes an enormous suck on productivity, and i think if i were to allow it, it would be a very short period of time before i would be before a committee saying, trying to answer the question how come your employees are spending all their time on facebook and other social media sites? the final thing is, if a judge becomes aware of something that looks fraudulent from social media sites, we have not told them to ignore it. what we've done consistent with our longstanding policies is tell them to refer it to the inspector general so that there can be a proper investigation. and i want to assure you, too, that, you know, social media sites are not exactly, um, clear and reliable evidence. it takes some context sometimes to figure out, well, is that really the person? be facebook puts up phony web sites under my name all the time. i've never signed up for facebook, but i'm constantly asking them to take down facebook sites that purport to be mine. and spouses, angry ex spouses do that to each other which is why you need professionally-trained fraud investigators to take circumstantial ed of -- evidence of fraud and see if it's real. so i think we're doing exactly the appropriate thing to do. >> okay. well, thank you, mr. chairman. i see my time's expired. i don't, i don't disagree there are abuses on social media platforms. i think we're all aware of those sorts of things. but i just, it seems to me that, um n enrolling beneficiaries in the ssdi program who don't meet its requirements is simply inexcusable, and i just think that any fraud prevention tool that's available out there that can be used and, like i said, law enforcement is using these mediums for their investigative purpose bees. we should be doing everything we can with every tool available to us in this day and age, particularly with the challenges we're facing fiscally in these programs, to get rid and root out fraud and abuse at every turn. >> that i actually agree with, senator. and what i would say is the inspector general does use social immediate blah ask -- media and other sites to start investigations, they do observe claim hasn'ts who they suspect of fraud. they've been underresourced in recent years. only about i think a third or a half of the cdi units that investigate that kind of fraud are funded now. so in addition to making a pitch for my budget under the president's recommendation, when you look at the ig's budget, um, they have, in fact, cut back a little bit on those cdi units. and that's the most effective front line unit that we have on fraud, and the congress hasn't been fully supportive of that. so i'd ask you to take a look at that. >> thank you, mr. chairman. >> thank you, senator. um, senator hatch. >> well, i have a number of other questions that i'll just submit them to you, but let me just ask this one because it borders a little bit on senator nelson's concerns, and i just thought maybe i should ask it. and it also is a question that i've been talking with my constituents about quite a bit. as i understand, the social security administration is seeking atation to the accessibility of information in the public death file, sometimes called a death master file, which the releases from the department of commerce to any subscriber. the ssa's legislative specifications in this regard call for modifications of current restrictions on the release of certain information, certification by the ssa commissioner of entities eligible to purchase the information and authority to impose fees, penalties, audits and inspections. there is, of course, a need to balance security concerns with data views or interests. it is unconscionable when data on deceased individuals are used in fraudulent ways such as tax fraud and some of the ways that senator nelson has mentioned here. yet here are -- i have to say, there are legitimate commercial uses of the data that actually serve to deter some fraudulent activities and insure that certain payments, such as life insurance payments, are promptly made. i also believe there are legitimate used of the data by private purposes for for forensr personal genealogical research which is something we do a lot of. however, the ssa explicitly identifies use of data as general logical purposes as an illegitimate need for such public information. now, such a stance is, naturally, of concern to me and, certainly, to many of my utah con stitch rents. now, mr. commissioner, will you be promulgating new rules for accessibility of the so-called death master file be, or are you, as i think it indicated, indicating a statutory change or a legislative change? in either case, will you assure me that you intend to work with members of this committee on any proposals to change accessibility? >> no, i think we're in agreement, senator hatch. i think i was trying to be clear with senator nelson that i don't view this as a problem that i can solve administratively. i don't think i have the authority to do it. and, in fact, the difficult balances that you're pointing out -- which i agree with completely -- i think help prove my point that that's classic legislative balancing. that's not something that the congress has, um, empowered me to make. we had a meeting over at ways and means earlier in the week, and we had this hearing. i was hopeful that we would have the specification converted to actual legislative language. we're not quite there. and a part of that, i think, should be encouraging to senator hatch since the specifications have become more public. it has raised some concerns, i think i give the administration broadly credit for listening to those concerns. it means that the legislative language is being a little bit delayed. but i don't think they're approaching this from a rigid point of view. i think they're trying to figure out the best way to balance those -- i'll be quite candid that the reason we don't have the precise legislative language up here now is there's some rethinking on a couple of the provisions. and i honestly don't know for sure precisely how they'll come out at the end. but whatever happens, enough overlap between senator nelson's bill, the administration's bill, congressman johnson's bill and the house that it's 90% overlap. and i think that everyone realizes that the most important thing is to get moving to make sure that the major abuses don't continue. and a lot of these other things are things we would be able to work out through the course of the legislative process. and i certainly commit to working with the committee and the congress generally to accomplish that. >> well, thank you. i want to compliment you for the good work that you do. you have my respect, for sure. and hopefully, we can work out this statutory language so that some of these problems that have been raised can be solved. and be you're one of the few people, i think, might be able to work that out in a way that would really work well.
CSPAN
May 25, 2012 9:00am EDT
as you know, colombia's faced decades of political violence. trying to make the transition in a way that both addresses accountability issues in a reasonable way and also moves forward in reconciliation is a challenge. but i think the attorney general's office and others have been very mindful of the need to strengthen the judicial system to move forward in a way affirmatively to build institutions that will protect all colombian people. and we are with them in trying to address those issues if an important strategic dialogue we have with them and in other ways we can be helpful. >> we'll take indira and two more. >> thanks. i wanted to ask you to highlight in iran what you feel is different in 2011 versus previous years and particularly compared to the green movement start in 2009. and i'd also like to ask you about eritrea. am i right in reading this that they're really the bottom of the barrel here, you know, is -- 199th on this list? >> first of all, in iran, sadly, 2011 was a continuation of many negative trends; intolerance of dissent, particularly a crackdown on demonstrators in february, free speech restricted, internet freedom restricted, political participation severely circumscribed, unfair trials, amputations, floggingses, lots of death penalty including some this year, many held in secret. so it's a very grim picture, and can i want in particular to single out the case of the seven, the high leaders who were sentenced to 20 years in prison. the sentence was reinstated last year. they're now, in may they marked four years of a 20-year sentence for, basically, practicing their religion. it is a human rights situation that is very disturbing, and we'll continue to call it out. eritrea, likewise, is a situation where there are a range of very serious problems. it's a government that restricts any kind of dissent or openness. i wouldn't -- we don't rank countries. unfortunately, there are a number of countries that have consistent gross human rights violations. they would certainly be on that list. >> wondering about afghanistan. the report calls -- [inaudible] marginally improved. but it also calls the gains tenuous. i'm wondering looking forward, are you concerned about 2014 and what happens when we transition? >> we are concerned, and afghan women and women's leaders are also greatly concerned. women are critical actors in the reconciliation and reintegration process. they need to be not marginal to the political process, they need to be fully engaged and their rights fully respected. and we are very mindful in having spent a lot of time with women leaders there, i can tell you that there is a big, a tall agenda in terms of integrating women into the political process. and making sure that women and girls' rights are protected going forward. we're very mindful of the challenge. at the same time, there is a vital and vibrant civil society there. they're more engaged. and so i think it's in our interests to figure out how we can help them, um, advance the agenda, amplify their voices so that they can be more effect bive in the coming years -- effective in the coming years. >> [inaudible] >> i want to go back to china. this report, of course, every year. there are millions of people in china who are seeking freedom and democracy, especially those who are being persecuted in the name of religion, they cannot practice any kind of religion there. and also -- [inaudible] and when secretary said that you are not alone, we are with you, they're still asking the united states that when will you be with us? and finally, as far as pakistan is concerned, journalists and extrajudicial killings and -- [inaudible] in pakistan? is. >> on china i would say this, you know, there's a long agenda, a big agenda on human rights. we deal with it in different ways. last month harold coe, legal adviser here and i, participated in a legal experts' discussion where we discussed a range of issues including the independence of the courts, independence of lawyers, detention issues and the like. um, we were part of, i was part of the strategic and economic tie log, and this summer -- dialogue, and this summer we will have a human rights dialogue where we raise these issues. so these issues come up in many different contexts. we're very mindful of the situation of religious minorities, the tibetans. we're very concerned about the self-immolation. we're concerned about the situation, the uighurs and elsewhere. we are going to raise these issues as well as some of the individual cases, some of which i've mentioned. we're going to continue to raise our concerns about labor issues and about a range of other things that matter to chinese people. these are issues that they're now increasingly debating within their own society. again, we're going to amplify their voices, and we're going to try to be reinforcing of that. on pakistan i would say you've mentioned the extrajudicial killings which is certainly one of the things the report singles out. we're very concerned about the violence in balochistan, we're concerned about the effects of those who challenge some of the laws like the blasphemy law, that case continues to be a cause for concern. we have a big agenda. it's a tough discussion, but we're going to keep having it. [inaudible conversations] >> i think we have to let the assistant secretary -- [inaudible] if you have additional questions, we'll take them, and we'll answer them for you -- [inaudible conversations] one on mexico, and then we'll let you go. >> [inaudible] watching and holding -- [inaudible] in your report you say that security forces, especially the mexican army and navy -- [inaudible] it's conditional to the performance of human rights in mexican -- [inaudible] i just wonder if what you said in your report is going to be applied on the policy of the american initiative? because the mexican society is complaining a lot under calderon calderon -- [inaudible] so far more than 50,000 people dead in fife and a half years -- five and a half years. so what is your response to this situation? >> well -- >> american issue. >> there's two points on that. one, as you say, mexico is a country where there's been endemic violence, much of it related to the drug trade and the government's efforts to curtail that. an aspect be, obviously, that government has not only the right, but the obligation to try to protect it own citizens. there are a number of reports, and we document them in this report, of abuses by or violations by the mexican military. we've had discussions, i've been down there several times meeting with mexican government including mexican military leaders about how to improve accountability for those violations. the longer-term effort has to be to build a police structure and a criminal justice structure that deals with these cases outside of the military. president calderon understands that and so does everybody else. but we are very attentiff to these issues -- attentive to these issues. we're working closely with the many mexican government, but also consulting broadly with human rights activists and others who share our concerns. >> and also just to remind you that assistant secretary posner is going to be able at 12:15 if you're not in the american media and you still have questions. thank you very much. >> thank you. >> we'll get the names. [inaudible conversations] [inaudible conversations] >> nasa administrator charles bolden speaks at the international space development conference in washington. his remarks will coincide with the scheduled docking of the first commercial space capsule at the international space station. it's part of the obama administration's long-term plan for replacing the space shuttle program which ended in 2011. the goal is to have private companies handling flights to and from the space station, allowing nasa to focus on deep space missions. this is live coverage on c-span2. [inaudible conversations] [inaudible conversations] [inaudible conversations] finish [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> good morning. good morning, ladies and gentlemen, welcome to the national space society's 31st annual international space adopt conference. my name is paul damphousse, i'm the executive director of the national space society, and on behalf of the members, chapters, supporters and leadership of the nss, i'd like to express our sincere thanks to all of you for participating in the what we feel will be the best conference in years. this year we have an outstanding lineup of speakers and topics from industry, government, academia and the new commercial space sector. and from you, the public, and our members of the nss. the nss is an independent educational nonprofit organization dedicated to the creation of a space-faring civilization. simply stated, our vision is that of people living and working in thriving communities off the earth and using the vast resources of space for the betterment of humanity. nss is widely acknowledged as the preeminent citizens' voice in space, and we proudly boast thousands of members and support beers in over 50 chapters in the united states and around the world. the society also publishes a magazine, an award-winning periodical, chronicling the most important developments in space. and as you'll see over the next few days, our international space development conference is the premier forum for the community. now, it should also be noted that the nss was originally founded at the national space institute first in 1974 and the l5 society inspired by gerard o'neill in 975. -- 1975. the two organizations merge today form what's today's national space society in 1987, and if you look in your program book, there's a copy of that merger problem proclamation. so this year is our anniversary, and while we will take time to are e fleck on where we've been, we'll do so with an eye towards where we are today and where we are going tomorrow, more importantly. and from where i sit, i can't think of a more exciting time for our future in space. now, while we face many challenges -- not the least of which is moving forward in a highly constrained and uncertain budget environment -- the opportunities for reaching our goals could not be greater than they are today. this morning's activities, as you'll, as we were seeing earlier on the screen -- [laughter] with the spacex dragon vehicle at the international space station is just one example of this excitement. and we would really like to send our sincere congratulations to elan and the entire spacex team for what's looking like will be a successful mission. [applause] yes, please. [applause] you know, in addition to that it's not just about the mission, but it's also about having that vision and pursuing that vision and pursuing it even when it seems difficult. and elan and his team are to be commended for that. right now real companies are building real hardware. not powerpoint charts, not animations, real hardware. and many of them are actually flying now including armadillo, blue origin, to name just a few. virgin galactic continues to pursue a vigorous test program, eventually leading to powered flight followed by subor thal flight. -- suborbital flight. syria nevada -- sierra nevada, once achieved the larger commercial crew program will lift the burden of surfacing low-earth orr wit, freeing up our program to focus on much more ambitious goals and opening up new frontiers in space. so we'll hear more about sierra nevada's progress from chairman mark sirangelo during his talks today and tonight. and real funding is beginning to flow into the commercial sector. a new generation of savvy space entrepreneurs is bringing us closer to that tipping point where space will someday be accessible to us all. with the google lunar x prize, nearly three dozen teams are competing for the largest prize in history and to ignite a new era in lieu far exploration. robotic sentinels continue to unlock the secrets of the universe around us. the keepler spacecraft is bringing us tax risingly -- tantalizingly close to that day when we will find other earth-like planets. close ore to home, relatively speaking, the reconnaissance of the solar system is nearly complete as the new horizon speeds its way to a 2015 rendezvous at pluto. and just a few weeks ago plan story resources announced its plan to mine asteroids for profit and elicited a response from tv comedian jon stewart. he said, finally, a headline worthy of the year 2012. so we'll hear more about planetary resources from its co-founder and co-chairman, eric anderson, today at lunch in what i'm sure is going to be a really compelling talk. so it's a really, really cool time to be involved in space, and it's only going to get better. we'll bring some of that excitement to you directly. this year's conference theme is onward, upward, reflecting this positive energy surrounding space today. so in addition to the speakers i've mentioned, we have a who's who of key people who are bringing this excitement to life. this afternoon we will look deeper into the business side of things with the space investment summit, and in conjunction with aiaa, we'll present the space settlement track in our design presentations. tomorrow we'll explore mars, the asteroids, space ports and space solar power. in a follow-up to his talk last year, jeff grayson will share his latest words of wisdom with us at tomorrow's dinner. if you saw his talk last year on space settlement, it quickly went viral, and we're all excited about seeing his follow-up to that. sunday we're going to have talks on the google lunar x prize, live anything space and a special announcement from excalibur -- [inaudible] and sunday morning we have a very special event as we host an nss heritage panel where we reflect on the national space institute, the l5 society and the merger that brought them together to form the national space society. and we're really happy to be joined by many of the leaders from that time including nasa's deputy director -- administrator and former executive director of the nss, ms. lori forward very. she will also join us on sunday night as we host our annual awards dinner. we'll wrap up on monday with, perhaps, two of the most important topics, education and outreach. and education and outreach are two of the most important things we do at the nss. s.t.e.m., science, technology, engineering and math are those topics that we encourage students to take on today to lead us into a brighter and stronger future. now, at this conference we have over 300 students in attendance from around the world, and if i could ask the students to, please, stand up and be recognized. if you're a student, please, stand up. [applause] so how many students do we have from india in where's india? there we are. [applause] how about romania? i know romania has a big presence. there we are, romania. wow. [applause] some other countries. >> ireland. >> ireland! [applause] where are our u.s. students? give us a big shout out. all right. [applause] well, this is fantastic. and i would encourage those of you who have been doing this for a while, been in the space community and you have stories and wisdom to share, find only of these young people in the next few days and share that wisdom and provide them with counsel. probably the single greatest highlight of this year's conference will occur tonight at our gala and our annual governors' dinner. so we'll with moving just across the national mall to the air and space museum where we'll present space pioneer awards for lifetime achievement to our guest can of honor -- guests of honor, john glenn and scott carpenter. the evening's theme of standing on the shoulders of giants, we will look to honor these american heroes but with an eye, again, towards the great things to come in space. it will be a truly spectacular event at a truly spectacular location. and we hope to see you all there. there are still some tickets available, so get them while they are still available. see one of the istc staff to get yourself a ticket. so rather than wait until the end of the conference which i know that we normally do when we're wrapping things up and while i still have some semblance of your attention, i these to recognize the tremendous effort of the isdc team for their incredible effort for this year's conference. this year's conference chair is nss' very own senior vice president and senior operating officer josh powers. where is josh? josh is probably directing traffic out there somewhere. [laughter] so really what's remarkable about josh is that he didn't actually take on this job until just a mere about four months ago, and he only had one requirement. he said i want to have a strong staff supporting me. and i think that he'll probably agree with me that that's exactly what he got. debbie cohen and angela pura, i don't know if they're in the room. i know they were up very, very late putting out fires. they've proven that you can pull a conference of this magnitude together in just under five months. and their work really has been nothing short of herculean. there is josh, he just walked in the room. they thought they put the lights in my eyes, and i couldn't see him. [applause] i'd also like to recognize our management services company, john flatly and darcy chuba for their data day support of our -- day-to-day support of our headquarters. and all the volunteers who have come together in the last several days to really help the conference take flight. if you're a volunteer, can you, please, stand? most of the volunteers are probably out -- there's one of our volunteers here, there's some in the back. there we are. so give them a round of applause. [applause] and i suspect she's probably not in the room either, but i really need to thank tunisia forson who's been the jack of all trades. she's really the person who keeps the headquarters operating smoothly and keeping our membership services running very smoothly, and she really keeps me out of trouble on a daily basis. so, again, please help me give these folks a round of applause for all of our volunteers and staff. [applause] so, again, if you see any of these folks, pull them aside and give them personal thanks. i'm sure that they'll appreciate it very, very much. so it's now my distinct honor to introduce our opening keynote speaker, the 12th nasa administrator, charles f. bolden jr. as administrator, he leads nasa's team and manages its resources to advance the agency's missions and goals. general bolden's 34-year career with the u.s. marine corps including. >> years z -- 14 years as a member of nasa's astronaut office. he traveled to orbit four times aboard the space shuttle between 1986 and 994 commanding two of those missions. his flights included the deployment of the hub el space tell cope and the first joint u.s./russian space mission. now, i personally have had the pleasure of knowing general bolden not only in this capacity, but also during the time when we both wore the uniform of the u.s. marine corpses and the wings of gold of a naval aviator. so our paths have crossed a number of times over the years, but the one that stands out curred as i was aboard the uss -- [inaudible] general bolden came aboard to fly with our squadron, and after the evening meal in the ship's ward room, we had a very candid conversation. he had a very candid conversation with the squadron's junior officers on leadership, service and really believing in something that's larger than yourself. and so i was one of those junior officers in the ward room that night and came away with an even stronger degree of respect for general bolden as a leader and as a man of principles. so i consider myself very fortunate and honored to introduce him today. so, please, join me in welcoming nasa administrator general charles f. bolden jr. [applause] >> colonel damphousse, thank you very much for that very kind introduction. and for those of you who are officially attached to nss, you could not be in better hands than having a marine, particularly a marine aviator, leading the charge. [laughter] so i feel really good about where you are. you know, it's great to be here at another international space development conference, and i think as has already been mentioned, your theme for this year, onward and upward, could not be more appropriate. before i do get into formal comments, i'd like to acknowledge -- and he may have been already been, but you can never do it enough -- the presence of buzz aldrin messing with his land yard, trying to figure out how to get it undone. [laughter] [applause] when you talk about some of us standing on the shoulders of giants, i don't need to tell any of you about the giant status that he has in the space program, particularly in human space flight. you know, as we gather here this morning, and you've been watching it a little bit, as we gather to talk about the future of exploration, hopefully all of you understand that that future is being defined even as we speak. and history is being made. right now spacex dragon capsule is joining itself to the international space station, and for those of you who may have come in late and said, well, i thought this was going to happen at 8:10 or something like that, i'll tell you a story. so that you understand what we're doing here. um, you know, the birthing process is still underway, and the last note i got from bill who's in mission control down in houston, the grapple should occur no earlier than 10:40 this morning. it's a cardinal resupply mission that is actually two flights in one. it's the second and third demonstration flight for spacex. i think many of you though that and know the trillion. their first flight -- know the drill. their first flight was in december 2010 when they became the first private company to launch a vehicle into space, orbit, safely return and land intact. now every milestone that they achieve is a first. so i described to people when we were down in the florida for the launch earlier this week that, um, this is an incredibly exciting and historic time for all of us because every evolution that they get behind them is history having been made. and they're now about 30 meters away from station and holding and getting ready to let the crew bring them on in to the grapple point where don pettitte will use the shuttle -- the shuttle, the station's arm to reach out, grab dragon and then pull it in and what we call birth it to the international space station. um, it's truly a major milestone, and president obama's ambitious exploration plan, one that seeks to rely on private industry to take over transportation to low-earth orbit so that nasa can focus on the really hard stuff. i said i was going to tell you a story because sometimes someone will find something to be critical about. .. >> it was fraught with adventure. we were scheduled to unearth hubble. steve hawley was the primary operator. i was his back. very simple process. we had trained for this for more than a year. we had a backup ready in case we needed it but, of course, we would not need it because everything was going to be really straightforward. steve and i got there, and steve checked out the arm and lauren and i put the vehicle in the proper position for deploy. steve reached in and grappled hubble and everything looked great. we started lifting it out and all of a sudden the things we planned to have happened started coming unraveled. because, you know, hubble was huge. weighed about 25,000 pounds. if you stuck your hand kanye get your best in the payload bay between the sides of hubble. that's a big it was. that's all the room it had. with the first movement of the telescope, steve and i noticed that they said it was starting to swivel. it wasn't coming straight out. and so, steve had to meticulously continually adjust the arm as he brought hubble out of the payload bay so we wouldn't hang it or do anything bad. and what was have taken maybe 10 minutes into the taking is almost an hour. just to get out of the payload bay. we put into the deploy position, or in the pre-position where the crown king in his was going to deploy the solar rays, combination of the key menus and and the team about goddard space flight center. so we begin appendages began to come out. high gain antenna on both sets, great. solar array on one side, great. solar array on the other side. not great. it got about 16 inches out and stopped. everybody's heart kind of went boom, boom, boom, boom. because that wasn't supposed to happen. and so for the next almost 10 hours of the day, the team, this evolution was supposed to take less than an hour. a number of critical things that now check you change your plan. this is where the plan is developed and perfected, and in life happens. so really important things like do not fire jets on the orbiter while hubble is on the end of the arm. because we didn't want to do anything bet. well now, we are out there just kind of, the orbiter's drifting for an hour, two hours, getting out of attitude. we are starting to worry about temperatures on the telescope because everything was such that would have the right amount of sunlight on it and everything. after several hours a team said okay, we've got to maneuver because you can't just let the telescope sit out there and freeze. and so they went to a lot of analysis and decided that we could do some minor maneuvering to get the vehicle back in position, and we did that. and another part of the crown king, particularly goddard, kept under to get what was wrong. this should not happen. the crew had been to bristol england, to british aerospace, the makers of the solar rays and we had used their water table so we could manually get them all the way out. you literally crank them out. so we now do that. we're hoping we wouldn't have to do because if you went to a manual deploy, then it really messed up the telescope. it would limit its life and a lot of other things we did not want to do it that we knew that that's what my come down to. so the flight control team said okay, get bruce and kathy ready to i was the crewmen, which means my job was to get them in there since. bruce and kathy sullivan and i floated down to middeck. went into the airlock, block out the emu's, the spaces and started to dress them. we got them ready. we got him into the airlock, close the airlock and started to depressurize. and nothing, could not figure it out. about five minutes away, the airlock was completely depressurize. we are probably five minutes away from having bruce and kathy open the hatch and go outside to manually deploy the solar ray. when, as i'm told, i wasn't there so i'm relating a story. this is many hand story but it sounds good. [laughter] young engineer at the goddard space flight center said you know, i don't think we have a problem at all. i don't think we have a mechanical problem. there's a module in the telescope called a tension monitoring module and there's been there for the specific purpose to keep the solar rays from ripping themselves apart if they meet some resistance. i just think that the tension monitoring module has gotten a bad one or bad zero. if we can override everything will be okay. to those left in the vehicle is have a somewhat from their but it sounded absurd because as bruce said, that first thing in the morning when the solar array start. bruce new hubble better than any human being i think because he'd been in on the design and development and everything. and present something about him when his attention money module is bad. we didn't think the time to ask this because we thought okay, bruce is, he was just bragging. so we didn't pay any attention so they said we think whenever problem with the tension monitoring module. we will let you know what to do. sure enough, they changed the one to zero, and opt, and the solar array deployed. they said okay, get into attitude very quickly, get the telescope released and we will go on. and so we did that. we didn't have time to get bruce and kathy out of the airlock. they had trained for more than two years of this event to be there with cameras and everything, and see their baby, the hubble space telescope, deploy. and they were in the airlock and they couldn't see anything because there was a little bitty hole looking out into the payload bay, and it was nothing in the payload bay because hubble was gone. and so we deployed hubble. we are jumping up and down. we weren't jumping. you know, yelling and everything to bruce and kathy isn't what's happening? we were describing it to them. they were not happy to. [laughter] to put it mildly. but i tell you that story because that's sort of like what happened this morning. there's an incredibly elaborate plan that was put together by the spacex nasa team, and then life happened. dairy center i will let the experts explain it to you later but very simply where a lot of sensors on dragon. x-band come all kinds of stuff. and the two sensors, laser range finders every once in a while started locking on to the gym module. we had to figure that out. we have to understand. so spacex has made some real-time changes to the field of view of the lidar everybody thinks that we're okay to go near. some of you may be getting more information than i am, but right now if i don't talk too long, i will be down and you get to see the grapple. so anyway, but i just wanted to tell you that story so that windows were skeptics start to write stories tonight, just tell the okay, show me one part that went flawlessly. sts-125, the final hubble servicing mission had acted back to back to back to back pdas. five deviates on consecutive days. none of us thought we could do that. and yet we pulled out. but it was not flawless. we had little things that happen all through that, but the key with the teamwork between the team on the ground and the team in the vehicle that solved problems as they arose and made things happen. that's exactly what you're seeing happening today. there is no spacex teen. there is no nasa team. right now today it's american team that's getting dragon in position so that it can be grappled by an international crew, not an american crew, by an international crew and birth to the interest they station. and further, make history. that's a big deal. so you all, hopefully you can jump up and down here. hopefully you will jump up and down and scream when it occurs within a few hours. we now transfer discovery, the vehicle just talked about, to the smithsonian. we sent in a price up to new york and it is waiting its move from a hanger at jfk. you must be from new york. are you really? hey. we are criticized for sending enterprise to new york, by the way. people want to know what the heck destiny of have to do with space? and i have to remind them periodically tonight we will celebrate the 50th anniversary of scott carpenter's return to earth from space during his mission. and guess what he was picked up and brought back home? uss intrepid. so, you know, when people say what does new york have to do with, you know, long island, new york where aerospace was, and the uss intrepid that picked up american astronauts, so, maybe not but i think that connects them to the space program, appropriately. private industry control of asks us to low-earth orbit is rapidly becoming a reality. we continue to make tangible progress on the heavy-lift rocket and the all right in crew exploration vehicle to take our astronauts to deep space. our effort to developing the many associate technologies is picking up steam. nasa's also making substantial and exciting progress in our earth and space science mission. our space technology and innovation efforts and inner eric not ask -- aeronautics research. so while our flagship program of 30 years now undertakes a new mission in museums to inspire the next generation of explorers, the space program remains very much a dynamic thing. a living history that we are creating every day. today is, and i'm not overstating this, a day that will go down in history. after a vigorous public discussion, the debate about our direction is over. we are moving strongly in to implement some very exciting plans. plans developed with bipartisan agreement between president obama and a bipartisan leadership in the congress. if you're still wondering if this new air israel, i think the spacex success this week should begin to dispel those notions. our current plans, follow suit later this year with their module launched on their vehicle. behind them are dream chases, the cst 100, liberty and other innovative private industry candidates to carry our u.s. astronauts to the iss and other legal destinations in the years to come. i'm not going to talk about it, but i hope you paid attention to my other destinations but i know there's a session, i think it's later on today, though it may be tomorrow, but it talks about the industry, a space industry and what makes that. and while you all are here, some of you need to focus on destinations. because we have a lot of launch vehicles, but launch vehicles don't make an industry. what's going to make this industry viable is destinations, places where people and scientists and experiments and other things can go and spend long periods of time in the microgravity environment of space but and a port and international space station or a vehicle that has a crew on it, that is not constant microgravity. every time i get on a treadmill and exercise, i jiggle the vehicle. and if i have a protein crystal growth experiments or in material science expo, i have agreed to the disturbance but i'm not happy with it because i know that i don't have to be in that environment. so some of you, and the are some common but some of you have to push for other destinations. places that have a state where somebody is doing materials processing or protein crystal growth, or anything like that, can put an experiment for six months, a year or more and not have to worry about some astronaut on a treadmill, on a rowing machine or bicycle or something else disturbing the microgravity environment. and i say that in all sincerity. pay attention. in fiscal year 2013, nasa plans for at least three flights delivering research and logistics hardware to the international space station. u.s. develop cargo delivery systems. as you've heard me say before, i'm committed to launching astronauts from american soil on spacecraft built by american companies. i use the term i, and i should not say that, but since i am the voice of nasa, i use the term i but i mean nasa. nasa is committed to launching american astronauts from american soil on spacecraft built by american companies because we are a family. i don't even consider us a team. we are a family and that's really big to us. nasa's fy '13 budget provides the funding needed to bring our human space launches back home to the u.s. and get american companies transporting our astronauts once again. right now, we are looking at proposals for our commercial crew integrated capability initiative. with these proposals were asking industry to complete the design of a fully integrated commercial crew transportation system that consists of the spacecraft, launch vehicle, ground operations and mission control. these proposals are going to lead to spacex a grimace for initial development and bulletins our efforts to help nasa and the u.s. achieve safe, reliable, cost-effective human access to space. all of our commercial partners continue to work diligently and innovatively toward their milestones. brad -- supporting boeing company during the development of its cst 100 spacecraft in nasa's commercial crew development round two, completed mission duration hot fire test on a bunch mission in march. blue origin has successfully tested the aerodynamic design of its next-generation space vehicle in development. and the vehicles have completed a series of wind tunnel test. throughout the field i've seen tangible examples like these. another important indicator of the future is that people still want to be astronauts. we had a record, a near record number of 6300 applicants for the class of 2013. and the 2009 class is already well into training for the missions of the future. their first stop is going to be international space station. now coming into its own as a laboratory and technology tested like no other. nasa's robotic refueling mission experiment aboard the iss, for example, recently demonstrated remotely controlled robots and specialized tools can perform precise satellite servicing tasks in space. we do great things on the international space station. more than 400 scientific studies were conducted on station last year. in an array of discipline, not just those related to human health. there are probably five to 10 investigations going on on any given day. these studies are proving helpful with everyday problems of people of all ages right here on earth. they're also apical to astronauts on long space voyages. we're learning a lot about the human immune system. in a response imbalance, visual acuity changes, and bone density loss, for example. some of this, particular research is especially relevant to our senior population here on earth. the call for advanced development proposal to space launch system just closed. j. to x. powerpack test of their and links are slated for this summer at the a1 test and help us learn more about the upper stage. the main engine inventory has been relocated to stennis in mississippi for use in the core. i hope we have the opportunity learned a lot an sls failed that is scheduled to be held later on today. thermal protection system work for the module continues at the ames research center in mountain view, california. a lockheed martin flight of orion will take place in 2014. that's two years from now. less than two years. with the first time crew acid test like a vinegar capsule and rocket scheduled for 2017. the 2014 flight will simulate a about 80% of the speed of a lunar entry and will tell us a lot about the struggle protection system and provide many other data points to buy down risk on orion for nasa flight to our commitment to science remains strong. although there has never been a time when they were not more things on her wish list and were able to pursue given our fiscal resources. but we will be at jupiter with juno and pluto with new horizons before you know. not to mention don's flight to the dwarf planet which will begin when it leaves the asteroid best at this summer. i hope you've seen the amazing results don has continued to send us about the best the excel. must of this is unexpected data that will help inform our future missions to asteroid with humans. information is still flowing in by the terabytes. somebody told me the other day, are you sure you mean terabytes and not terabits? so i don't know. [laughter] so i'm going to ask someone here can do i mean terabytes? terabytes? terabytes? probably. i like that answer. okay. i'm sticking with it. that's what's in the script of information is still flowing in by the terabytes from hubble, l. o r., mro, stl, swift, and many others. documenting an ever-increasing number of planets. showing that our solar system is just one of countless others. at james webb space telescope is being developed for launch in 2018. as the successor to the hubble space telescope, web will allow us to continue to revolutionize our understanding of the universe. by appearing across space and back in time to the formation of the first stars in galaxy. it recent reach a hard work milestone with completion of the backplane that will support the telescopes mayors, instruments and thermal control systems. the mars rover known as curiosity will land on mars in august. they are it will demonstrate precise, precision landing technology, enabling us to probe the mysteries of the red planet in unprecedented new ways. this nation is also an excellent example of the synergy we're trying to nurture between exploration and science. as the rover performs amazing research using the most sophisticated suite of tools, we have ever been able to send to mars. at the same time, we're also developing an integrated strategy to ensure that the next steps for mars exploration will support a science as well as human exploration goals. and potentially take advance of the 2018-2020 exploration window for mars missions. in space technology, there are about 1000 projects developing the technologies we need for today, tomorrow's mission. in the nation's laboratories and test chambers, mass is driving advances in high payoff space technologies and developing amateur and broadly applicable technology in areas such as in space propulsion, robotics, space power systems, deep space communications, cryogenic fluid handling and entry descent and landing, all of which are essential for exploration beyond low-earth orbit. the space technology program has recently given out the second round of space technology fellowships to help us develop tomorrow's leaders and benefit from their work now. you should also know that we haven't forgotten the first aid in nasa. in aronofsky our investments are driving technology breakthroughs for cleaner, safer, or efficient aircraft. the millions of air travelers around the world will benefit from our work and a partnership with the greater aviation community to transform our air travel system. we are accelerating the nation's transition to the next generation air transportation system, or nextgen, and making commercial aviation safer, more fuel-efficient, quieter and more environmentally friendly through investments in revolutionary concepts for air vehicles and air traffic management. so with the retirement of the shuttle, nasa is not only still in business, we are pushing the envelope of current capabilities and bringing new ones to life. you can do a lot with a $17.7 billion budget request we have for fy '13, and we will and we are. our budget is stable, and while some tough decisions have to be made, that's true for everyone these days, from government agencies to households. i believe with the right balance to accomplish great things now and into the future. i believe that the best is yet to come. are bigger dreams are just starting to come to fruition. at its core, nasa has more than ever about american innovation and american ingenuity. i want to stop amid. students, stand up again. please. look around, those of you who are older and students. [applause] look down at this group. this is our future, and they are from all over the world. and they believe that we're going to do the things that we've been talking about for decades. thank you all very much, but that is the future of. [laughter] [applause] this is all about keeping the u.s., the world leader in space exploration, and not for any bragging rights or anything. buddies because our international partners expect us to be the leaders. they expect us to maintain our leadership. they look to us to be the leaders in this center. you know, if you haven't effort, and there is a leader, then you are going nowhere. in the international partners really depend on us. to get this done. so we cannot disappoint. i ready believe this is going to be an amazing ride. you know, the future is literally happening right now, and nasa intends to lead the march to a. i hope most of you share my enthusiasm, and you're willing to join us in this great adventure. i thank you very much again for allowing me to be with you this morning. i have enjoyed it. i think i have time to take a few questions if some of you have them. so we will give it a shot and see how it works, but thank you all very much. [applause] >> i believe we have several microphones around the auditorium, so if you want to queue up for questions. i will take the personal. thank you very much for that speech and for your leadership as we move forward to the future. at a recent senate hearing, it really struck me in something you said about the dragon vehicle. can we pull the image backup? we are getting really, really close. that's a perfect setting for questions and for what general bolden said at the senate hearing. and the graviton of what's about to happen, when dragon is grappled, brought into the station berth, locked in place, the hatch is open to you said those two spacecraft become one and they start sharing moment of inertia and atmosphere. and i was wondering if you could just expand upon that although for us. >> i, very simply. when we connect just as we always do no matter what the vehicle is, when we connect dragged into the international space station and the crew verifies the pressures on both sides of the hatch are equal so that we can open the hatch, and they open the hatch, the breathing air is the same. i mean, it's one support system. and that's really, really, really important. and for the week or so that dragon is going to be berth to the internet space station are criminals we put in a just as it were another module on station. so it is, you know, it stops being spacex is dragon module for a week and it becomes just another part of the international space station. and julie need to grasp that because that's really, really, really important. we've got a lot, i won't call it, i won't say that, but we have a lot of detractors who really won't let go of progress. and the fact that history is being made today. you know, while not the same as man's first footsteps on the moon, this is an incredibly historic milestone, and it sets the tone for a new path on which the u.s. and our international partners are entering. when nasa doesn't have to spend its time and its valuable assets on providing access to low-earth orbit. that's what american industry is going to do. and i think you will see over time not just american industry, that industry from other nations. and that's what we're looking for, so thanks very much. all right. thank you. [applause] >> there's a possibility of a sequestration later on in the year. how would that affect nasa plans and programs? would be an across the board cut, or would you have to cancel specific programs? >> we really haven't taken the time to spend a lot of -- we don't spend a lot of time analyzing what the result of a sequestration would be. that's what we've been told as a part of the administration to just move along with the plans as we have them, work on what we hope to do with a twinkle budget when it is finally settled, and if sequestration comes, which we are all hoping that congress and administration, everybody, reasonable people can agree and we will have to do that. but as it is set up a sequestration is supposed to be across the board cuts, across the federal government. so i don't need to tell you what that would mean in terms of many of the programs that we have. but we are not playing for sequestration. we are not, you know, we are not developing alternative plans for the budget or any of that kind of stuff you're we are being goldens eternal optimists. >> questions about the terrestrial planet finder. i've been out of the loop for a while. what is the status? is that still operational? a little bit about the astrobiology program. >> i'm sorry, i'm, for some reason i was looking at my coffee cup and i miss your very first statement. you were saying about -- >> question about the treasure planet finder that is going to look at extrasolar atmosphere is. is that still online? and a little bit about astrobiology, future of nasa. >> i can talk a little bit to astrobiology but i'm going to have two, where is -- let me find out about the terrestrial planet guide. because i don't know. .. >> and there is some absolutely incredible work going on. when you talk about sending humans to mars, for example, food, construction material, all those kinds of things, the you're talking about weight, you're trying to get it down. some of the more elaborate areas of astrobiologic research right now are producing food from microbes, producing building material from microbes. they actually showed me some microbes that they're using to build to make concrete. and, you know, when they test it against portland cement -- i guess that's the gold standard -- it is as strong as cement samples that we've gotten from the major cement makers here in the united states. so the future is, astrobiology is playing a critical role in that, okay? >> i notice that president obama has set a goal of us going to the asteroid, of sending a manned mission to an asteroid in 2035 which, obviously, is about 23 years from now. isn't that a little bit underwhelming? and i have the impression that it'll probably be canceled. and then there'll be no goal after that. instead shouldn't we go to mars, like maybe follow robert srx ubrin's plan to mars or something more ambitious? >> well, it's actually 2025, and we don't have an asteroid identified yet. it's very difficult to find -- i mean, i know it sounds, okay, piece of cake. we've got to do several things. we have to identify and characterize an asteroid that is bigger than a rocket ship. and right now there are a very small number of candidates that will be available in 2025. the other thing about an asteroid mission unlike going to a planet is, you know, if you pick an asteroid that's going to be in your window for a short period of time and you miss it, then you've missed it. and, you know, there's no, okay, we'll hold and wait until it comes back around on its next orbit. we're not going to do that. so i don't think it's underwhelming to say 2025 for an asteroid. going directly to mars would be nice if we knew how to do that. we don't have the capability to do it just yet. and there are other nations that think we should go other places before mars. our ultimate goal stated by president obama is mars in the 2030s. and that's why you see the heavy lift launch vehicle, that's why you see commercial crew. all of this are milestones on the road to getting humans to mars by 2030. >> yeah. also if we go to an asteroid, what are we going to do there except -- we're not going to exploit it -- >> well, i'd ask you to talk to the guys, you know, who are talking about mining asteroids. and i don't -- look, i don't second guess anybody. i try to facilitate the success of entrepreneurs and people who dream big dreams and people who talk about mining asteroids, i think they would probably want to discuss it with you. but i'm not, you know, i'm not the one to do that. >> okay. >> yeah. >> we've got a question in the back there. >> hello, dr. bolden. what can a grassroots volunteer education and advocacy organization like the national space society do to best, to best help nasa achieve our mutual goals? >> you know, i think one of your basic goals and objectives is the fostering of s.t.e.m. education and the like, and we, you know, we have technical challenges with going to space. we have a major societal challenge in solving the puzzle of how to get our kids interested in science and math and engineering and main tape that interest -- maintain that interest and be able to track them so that we know which programs are successful and which ones we should shed. you know, we don't have very good metrics right now. i can tell you about nasa. for which of our programs are successful in reaching kids and bringing them to s.t.e.m.-related jobs, if you will. so the work that nss is doing, i think, is key. collaboration with other nonprofit organizations that are doing the same kind of thing, plus american industry. you know, we talk to industry quite a bit now about our s.t.e.m. initiatives, trying to collaborate wherever possible because there are just, you know, there are limited funds for everything. and you frequently find the first thing that gets cut is education. wrong, you know? i don't think that's the right tack to take. but it's very easy for people to target funding for education and say we'll get around to it when we can. we need to get around to it right now. so i would say the work that you're doing is key. okay, yes. >> good morning, general bolden. you mentioned earlier during your talk about being an optimist on being optimistic, so i have an optimistic question to ask especially in the light of the birthing going on here with the dragon capsule. is it possible or are there any plans for, um, an acceleration of commercial space flight activities based on this success that we're all looking at now and based on the plans with the competitors, basically, of spaceand? spacex? are there plans sooner than possibly 2016, 2017 if these successes continue? >> that actually depends on the ability of the private companies to get through the development process with their vehicles. we've said -- and we've taken a guess, a swag. we've set 2017 at -- as the operational ready date because nasa's budget says if we do the support that we think we can do, then this is technically where we think companies will be when they're able to provide support for crew. some companies are saying they'll be ready two years earlier. you know, if that happens, then that's great. but right now based on nasa's funding alone as an investor, if you will, we see 2017 as the date. that's too long, i admit, much too long. but that's where we are based on the congressional funding, the congressional level of funding. you know, if you remember, um, and we do have to -- we continue to work with congress. and i will say the bipartisan support that we have gotten and continue to get in this day and age is incredible. you know, everybody wants nasa to be successful. everybody wants the private industry to be successful. in spite of what you may hear and what you may think. it's just that everybody's not the same, not a believer at the same level just yet. after today i think you're going to find that there are many more believers than there were an hour ago. [laughter] because, and it's -- think about it, okay? at nasa i tell our family, look, folks, let's plan well, and then let's execute. if we deliver things on time and on cost, people will believe what we say. the reason that we're struggling right now is because prior to this administration, um, you know, we were not getting the funding requested, and we were not able to deliver on time and on cost. anytime you get less money for something than you forecast needing, a couple of things happen. either you stretch it which means it gets more expensive, you know, it never gets cheaper. never gets cheaper by taking off the funding contrary to what some people may think. so i think we're on the right path. 2017 is a conservative estimate depending on how industry performs. we could be quicker. i keep my fingers crossed. >> one last question. >> thank you. >> first of all, can we get one more round of applause for this successful grappling? [cheers and applause] that's what i'm talking about. my question for you, mr. bolden, thank you very much, is you were talking about how the contracts for the sos were closed. have, has nasa selected someone that could possibly be doing liquid rocket boosters instead of the solids, or is that something that might be looked at in the future? >> no, i didn't -- if i said that, i was in error. i did not intend to say contracts were closed, i said work on the sls and orion continues. you know, we have a prime contractor for orion, it's lockheed martin. that's been settled. while we have contractors involved in the space launch system, we still have a number of things that are open. advance boosters that are going to take us to 120, 130 metric ton vehicle. when we launch sls in 2017, it's going to be with the existing rocket motor provided, originally intended for shuttle. it will have shuttle main engines that have been modified to be the core for a liquid hydrogen, liquid oxygen main propulse system. -- propulsion system. and then, you know, the structure itself will be what we have today. you'll have stainless steel tankage and the like. when we go to mars or when we go to places beyond low earth orbit in the future with humans, ideally, we're going to have composite tanks, we're going to have a lot of different components that are much lighter and more resilient than what we have today. that's the source of our -- or that's the purpose of our technology development program. and when i tell people that the space launch system is an evolving system, it is not something -- what we're used to in the past in nasa is we decide on a design, set the architecture, and we go with it. and ten years later you end up with a vehicle that's ten years old, and it hasn't even flown. shuttle was that way, to be quite honest. you know, we, we made an upgrade to shuttle when i was still in the astronaut office of measurement units. we took some from the b-1 bomber that were going to offload the general purpose computers, found out that the architecture was so rigid that you would have had to design the software package on shuttle completely to be able to accommodate the new inner cial measurement unit. so we could not do what we wanted to be able to do. what we've said with sls is we want to be open architecture to the greatest extent possible. so software decisions probably won't be made until a year out or months out or whatever. it'll be like spacex. some of you know that spacex slid because they made some late software modifications to their rendezvous software which, incredible flexibility. nasa's not quite ready to do that yet as flexibly as industry is. and so it took us a while, you know, people need to understand this is a team. so, you know, spacex's name was in the spotlight, but every once in a while some of the delays were delays that we had to impart because we were trying to catch up in some cases. it's an incredible team when you watch 'em. i mean, just sitting on the net this morning listening to the decisions being made realtime, how do we deal with these thicks that we're -- things that we're seeing, how do you deal with life when it occurs? we had a great plan, but things happened that were not anticipated. but in going through what are the failure modes that can occur in your planning, the team said, okay, we think we understand this. here's what we need to do. and the first backout, the first reverse al qaim from hawthorne. spacex said we don't like what we're seeing, we're opening. they informed mission control that, hey, we're going to stop, we're going to back out a little bit because with we see something we don't like. that's great. that's what you want the team to do, and that's what they did. i want to thank you all very much for allowing me to spend this time with you and, you know, hopefully, you're as excite bed as i am. i -- excited as i am. i mean, we are, the future is incredibly bright for us, and we just have to stick to it and be resilient and, you know, don't give up because we're doing okay. thanks very much. [applause] >> so we'd like to present you this small token of our appreciation. it says presented at the 3 be 1st -- 31st annual national space society conference, and you see it surrounded by the moon and mars and, fittingly for today, the national space station. so, please, accept that honor. >> thank you. [applause] okay. we're going to be a little bit flexible with the morning here because of the events with, with -- at the international space station. i would like to right now take a ten-minute break, a firm ten-minute break. we want to reset on some of our speakers. we are potentially going to have a speaker from spacex this morning, and so we want to be flexible on that. but ten minutes. and at the risk of getting in front of the ipc staff, i believe we will have some time later this morning to get the registration issues sorted out. so you don't necessarily need to jump into line right now. is that a good order? [inaudible conversations] okay. if you're attending the lunch today, we will have a list at the door for lunch, and you can do your registration there when you enter into the lunch, and that will help us figure it out -- >> we're going to move on from our, with our programming now. you can see the speech that you just saw online at c-span.org or in our video library. >>> at 12:30 eastern here on c-span2, highlights of the british inquiry into the connection between key politicians and the press. the leveson inquiry talks to james murdoch who once headed news international, rupert murdoch who started news corporation and former editor of the closed "news of the world" tabloid, rebekah brooks. they talk about their relationships with current and former prime ministers and opposition leaders. c-span will be live at 11 eastern as the brookings institution hosts a discussion of the international role of the u.s. panelists discuss global security threats and how the united states works with the international community in dealing with them. wisconsin voters go to the polls in about a week and a half to decide whether to replace republican governor scott walker less than two years after he was elected. governor walker will debate his democratic opponent, milwaukee mayor tom barrett. you can see the debate live from milwaukee tonight at 9 eastern on c-span, and the debate will also be on c-span radio and c-span.org. >>> this is an extra day of booktv this holiday weekend on c-span2. aaron burr may be best remembered for his duel with alexander hamilton. h.w. brands on a different side of the new york politician and vice president, saturday night at 8:30 eastern. and on "after words," the former director for asian affairs at the national security council, victor cha, on the impossible state, north korea. >> dialogue with the north koreans on human rights is, it's kind of a ridiculous dialogue. because you can tell them you need to improve your human rights situation, and their response to you will be -- and we've had this conversation at the official level -- their response to you will be, well, you, the united states, have human rights problems too. i mean, that is not a comparable discussion. >> that's saturday night at 10. also this weekend marcus luttrell details operation red wing from "service: a navy seal at war." sunday night at 10 eastern. three days of booktv, this weekend on c-span2. >>> the senate veterans affairs committee addressed the backlog of military disability claims during a hearing wednesday. a government accountability office report says some service members are waiting a year or more to receive decisions and benefits. defense and veterans department officials tell the committee that the current system is better, but say there's room for improvement. senator patty murray chairs the committee, senator richard burr serves as the ranking member. it's about an hour and a half. >> good morning and welcome to today's hearing to examine the ongoing efforts of the department of defense and the department of veterans affairs to provide a truly seamless transition for our service members and our veterans. almost a year ago today this committee held a hearing on va and dod efforts to improve transition. we explored a number of issues including the integrated disability evaluation system. at the hearing we had an opportunity to hear from both departments about the state of the joint program. the departments' testimony that day spoke to how the departments had created a more transparent, consistent and expeditious disability evaluation process. their testimony also states ides is a fairer, faster process. well, now that that joint system has been implemented nationwide, i have to say that i am far from convinced myself that the departments have implemented a disability evaluation process that is truly transparent, consistent or expeditious. there are now over 27,000 service members involved in the disability evaluation system. as more and more men and women return from afghanistan and as the military downsizes, we are going to see an even larger group of service members transition from the military through the disability evaluation process. this process impacts every aspect of a service member's life while they transition out of the military, but it doesn't stop there. if the system doesn't work right, it can also negatively effect the service member and their family well after they have left active duty. getting this right is a big challenge, but it's one that we have no choice but to step up to meet. i've seen the impacts of a broken system, whether it's from a wrong diagnosis, an improper decision or never-ending wait times. and when the system doesn't work and service members can't get a proper mental health evaluation or diagnosis, it means they are not getting the care that they need. without the proper care, these men and women may find themselves struggling to readjust to family or civilian life, and they often struggle to find work. worse yet, we've heard stories of soldiers overdosing on drugs and in far too many cases taking their own lives. these are real tragedies affecting real service members, and they're happening despite a system intended to provide greater support to our wounded, ill and injured. i've seen firsthand the impact an improper decision can have on a soldier and his family. earlier this year i met sergeant first class steven davis and his wife, kim. stationed at joint base lewis-mcchord in washington. er gent davis led his men in combat in both iraq and afghanistan. he was exposed to multiple ied explosions during his service, and after being treated by the army for years for ptsd and other mental health disorders, he was told during the disability evaluation process that he was making up his ailments. from speaking with him, i can tell you that sergeant davis and the hundreds of other men and women at joint base lewis-mcchord are far from satisfied with the transparency and consistency of the disability evaluation process. all of these men and women had been diagnosed with and in many cases were receiving treatment for ptsd during service, but then during the disability evaluation process they were told they were exaggerating their symptoms, they were labeled asthma lingerers, and their behavioral health diagnose know cease were changed. since then the army has launched investigations, and hundreds of soldiers are now being reevaluated in an effort to make this right. in fact, the most recent update from the army shows that out of the 196 cases that have been reevaluated, 108 have resulted in a diagnosis of ptsd. that is more than half of these men and women. still more have received other significant behavioral health diagnosis. other referrals and evaluations are still occurring. and i'm still hearing from those who have completed their reevaluations only to find themselves stuck back in the same disability evaluation system that failed them. despite all these men and women have been through, they continue of to have their behavioral health injuries minimized and feel like their chain of command doesn't understand what they're going through. clearly, more needs to be done to build uniformity and accountability into the process of identifying those who are struggling with ptsd and other behavioral health problems. in recent weeks the army has taken a number of steps in the right direction. their recent policy on the diagnosis and treatment of ptsd addresses a number of the concerns that identify raised. it standardizes the army mental health care through the use of proven treatments and assessments, it recognizes how extraordinarily rare it is for service members to fake symptoms of ptsd, and this acknowledgment is critical as we saw all too often that accusation at mad began army medical center. additional, the army took a critical step forward by announcing a comprehensive, army-wide review of behavioral health evaluations and diagnosis in support of the disability evaluation system. i want to applaud the army leadership for taking some significant steps towards addressing these issues. this is going to take continued engagement from the army leadership. now, i know some may argue that this is just a joint base lewis lewis-mcchord problem or an army problem, but it is not. this is a system-wide problem. we will continue to see similar issues similar to those at madigan until we insure policies and actions like those we've seen in recent weeks are adopted across the services and throughout the joint system. insuring service members receive a proper diagnosis and the care and benefits they earned is an obligation we have as a nation. we owe it to these men and women to get this right. these are not the only challenges confronting integrated disability evaluation system. we're going to hear today from gao about other challenges facing the d., challenges -- the department, challenges which i must say sound all too familiar. everyone on this committee knows of v.a.'s struggles to address the claims backlog. i'm troubled, because numbers paint a similar picture. enrollment continues to climb, the number of service members' cases meeting the department's timeliness goals is unacceptably low, and the amount of time it takes to separate and provide benefits to a service member through this system has risen each year since its inception. this continued rise in the amount of time it takes to provide a service member with a decision has to be addressed. the goal the d.s have set -- the departments have set for completing is 275 days for active duty and 305 days for reservists. last year on average it took active duty service members 394 days and reservists, 420 days. that's around 100 days longer than your goal, and it is similarly unacceptable. dr. rooney, mr. gingrich, right now the departments are failing these service members. the only thing this committee's interested in are the solutions to this problem and the dedication of your leadership in making things better. we cannot allow the same problems that plague the larger disability claims system to negatively impact the transition of thousands of service members in the next few years. the consequences are too severe. clearly, a lot of work remains to be done. what we've seen the army moving in the right direction. now dod and v.a. need to take these lessons learned and apply them across the entire system. not only will this require or quick action, but most importantly, this effort is going to require the total engagement, cooperation and support of all senior leaders at both departments to get this done right. while dod and v.a. are at a critical juncture, i'm confident that by working harder and smarter and faster, the departments can improve the system for thousands of men and women who will be transitioning in the next couple of years. and with that, i will turn to but senator burr has been at another meeting, just joined us, so we will turn statement. you, chairman murray, and thank you for holding this hearing to discuss how well this evaluation system is working and what is being done to improve it. joining us today. it's clear that the integrated disability evaluation system, or ides, is still facing real and taking more than one year for service members to the v.a. and department of defense intended. at some military bases, it is still taking much longer than that. in fact, only 18% of active duty service members are transitioning to civilian life within the agency's 295-day goal. during this time wiewbded, ill -- wounded, ill and injured service members are waiting to find out whether they can continue serving in the military or will have to build new lives to move on with their lives, this must seem like an eternity. i think the number of service members in this process who are administratively discharged or court-martialed or died from unnatural causes including suicides and overdoses raises serious questions about what the well being of our nation's wounded warriors. also i think we need to consider whether the ides is truly setting them up to succeed after leaving the military. as the committee has been told by many service members going through this process, the uncertainty about where -- when and where they might leave the military can actually prevent them from getting their civilian lives in order such as buying a house, finding a school or taking a job. on top of that, it appears this system is not as straightforward or user-friendly as it was intended. listen to what the wounded warrior project said about the ides project earlier this year. our wounded warriors still encounter great difficulty navigating a system they find difficult to understand, unnecessarily contentious and often ponderously slow. other words that have been used to describe ides include adversarial, long and disjointed. there's another hidden liability here that i think is important to note, and that is the potential impact that the backlog may have on our military readiness. particularly in a time when some in washington are talking about drawing down our force strength. right now there are about 19,000 soldiers in just the army who are in this process. i am under the impression that these service members are still considered as being in the military, so that comes out of the bottom line for army's end strength and cannot be replaced until they have completed the ids process. based on these and other issues we'll hear about today, it's having created a seamless transition for many wounded, ill and injured have a good discussion about what can be done to simplify this disability system, speed up the process for those who are ready to move on with their yield back. >> thank you very much. senator? >> i just ask unanimous concept to put my statement in the record. thank you. to put pressure on the dod to make sure they're doing their job as we put pressure on the va to make sure they're doing their job. let me give you a quick statistical. secretary ainsaku mentioned his bill is 125 days. ninety-seven% accuracy. right now according to the report mr. "after the bell" put out it is 394 days and 79% accurate. we have an issue here and the reason i know why we have an issue is because we have veterans calling me all the time. it is too complicated and they don't know how to get through it and quite frankly the folks of this country deserves better. we have to figure out how to get this right. a look forward to that if you do correct me. the bottom line is what this committee does is important but what is more important is the service we give our veterans and the folks who need help need to get it now. thank you, madam chair. >> at this time i would like to introduce today's witnesses. the representative of the department of defense is undersecretary jo ann rooney. we have a chance to talk about several issues that the appeals hearing i held a few months ago and i appreciate your willingness to testify before this committee and continue to focus on this issue. joining us from the department of veterans affairs is chief of staff john gingrich and from government accountability, daniel bertoni, director of education, work force and security issue. thank you for joining us this morning and we look forward to hearing your testimony. your prepared remarks will appear in the record. we begin with dr. rooney. >> thank you. good morning. chairman murray, ranking member burke and members of the committee. it is my pleasure to testify on current efforts to review and improve the integrated disability evaluation system. i am please to appear with one of my partners from the department of veterans affairs. i am looking forward to -- wounded, ill or injured sir dismembers as a transition to veteran status. taking care of our service members is the highest priority of the department of defense. part of taking care of our service members includes insuring their honorable service is recognized and they are compensated in dod and be a systems for injuries that occurred during that service. the department has taken care to accomplish this that there's more work to be done. the department of defense and veterans affairs have worked together with guidance from congress to reform but cumbersome and often confusing bureaucratic processes which provide care and benefits to injured service members when and where they need them. working closely, deliberately and collaborative we and our department have established governments at the highest levels to facilitate continued improvement. the joint executive council cochaired by the of the aid that the severe gold, each bimonthly meeting to reviewing the progress and understanding the ongoing actions toward achieving our goal of seamless transition from service members to veterans. similarly the quarterly meeting conducted jointly by the secretary of defense and secretary of veterans affairs with their senior leaders to oversee and drive progress towards the stated goals. one of these efforts ides is, which has a more consistent devaluation and compensation, easier transition to veteran status, case management advocacy an established relationship between the service member and be a prior to separation. it provides increase transparency through better information flow to service members and their families as well as a reduced gap between separation or retirement from service and receipt of va benefits. the ides streamlines the system with service members receiving a single set of physical disability examinations conducted according to va examination protocol. proposed disability ratings prepared by the a that those departments can use and dual processing to ensure the earliest the ability of disability benefits. currently the ides is at 139 locations across all services. since november of 2007, 19,518 service members have completed the ides process. the ides reduced opposed separation benefits gap between dod and va from an average of 240 days in 2007 to 50 days currently. which means disabled veterans receive their va benefits 79% faster under the current ides than before. even with a marked improvement in performance the va has -- the ides has brought to the process we have much work remaining. both departments are committed to constant evaluation of each step throughout the process and will continue to seek long-term innovative solutions focus on improving the experience of our wounded warriors. we must do that. we also must carefully review the critical steps in ides to reach the 295 d. a. completion goal for 60% of those entering the process by the end of this calendar year. the military services are in the process of implementing actions to improve efficiency and effectiveness. since october of 2011, this fall, the army had 513 medical evaluation board and physical evaluation board personnel and enhance the accountability by establishing performance metric to measure the productivity of board staff. the army completed assessment of the execution of the ides installations across the army. this assessment identifies specific actions required to enhance and standardize performance across the army. the navy and marine corps added ten doctors and 37 case managers to their medical evaluation board staff last year and anticipate the addition of 23 more doctors next year. physical evaluation board staff have increased navy and marine corps by 47% allowing them to process 75% of the navy and 69% of the marine cases through this particular phase in less than the 120 days goal. the air force has started to utilize air force national guard personnel to support the evaluation process and establish a free ides screening process to increase efficiency. the office of the secretary of defense has removed policy impediments and implemented procedural improvements and enhanced oversight and assistance to the services. examples include reducing minimum informal physically evaluation board staffing requirements from three members to two members. authorizing dr. levels and psychologists to sign medical evaluation forms prior l.a. were not able to. allowing military department to process initial trainees to the legacy ides system. they ao they is working with va partners to improve ides execution by improving training and case management software, implementing a paperless standard for electronic transfer of files by this summer and developing other integrated electronic record file sharing methods which will enhance the efficiency of the ides. department anticipate these improvements when implemented this summer of 2012 will reduce ides time on average by 20 to 30 days. the department can finish the disability evaluation of compensation of injured, 0 and wounded serve as members is thorough, fair and accurate. we are continually reviewing the process in requirements adequately staff and when necessary surge the ides to remain responsive to recovering service members in the services as they draw down and reset their forces. we understand there is room for improvement in all parts of our processes and are committed towards working that end. an all volunteer force has seen marked improvement in survival of previously and survivable combat injuries. the expectations of what happens after a service member becomes ill or injured are fundamentally different. the department is now focused on taking advantage of all the advances in medical care, restorative therapy and rehabilitation to allow service members to achieve his or her greatest potential. this includes retention in military service whenever possible. this concept is being made whole, reflects a commitment to service members to restore the highest level of function possible physically, mental leap, spiritually and financially and providing all benefits that are justified. the target of 295 days to complete the ides process was identified to express concerns and frustrations of service members who did not believe they were being properly cared for and felt they were languishing and in sensitive system. sins these issues surfaced many resources have been brought to bear to improve the coordination and care and education of benefits. the complexity of injuries, sophisticated treatment strategy, coordination of care and change in a philosophical -- patient centers and military department centric has redefined the timeline for completion of the system. it is more centered on improving and defining ability rather than focus on transition of a service member to veteran status and is individualized to achieve this goal. the department reaffirms its commitment to care for an audit those who protected the nation by serving in uniform in order to meet our sacred responsibility to this next greatest generation we must fully leverage the capabilities and strategies and strengths of both the department of defense and veterans affairs. we must break down the barriers that prevent us delivering the highest quality care to those who need it and deserve it. thank you again for the opportunity to be with you today. i look forward to questions. >> mr. gingrich. [inaudible] >> joined by undersecretary -- okay. under secretary jo ann rooney. to discuss the ides system. we have come a long way since the issues of walter reed army medical center identified in 2007. at that time va and the dod were miles apart. simply stated the lack of integration and cooperation between the departments did not serve wounded service members well. since that time together we have committed to achieve a seamless transition to a multi pronged approach with ides as one of the critical initiatives. the joint ides process was designed to eliminate time-consuming and often confusing elements of the separate disability processes. the goals of the joint process were to increase transparency, reduce processing time, improved consistency and reduce the benefits gap to achieve greater transparency for serve as members we have enhanced our online tool. the my healthy that and keep benefits to all service members and ides to view lab results and track their claims. internally we have increased transparency to the ides board to attract each ides site. secretaries have charged us to reach a combined performance goal of 295 days for 60% of service members by the end of this year. to insure we reach this goal i hold by weekly reviews with 116 stations. in a relatively short period of time we have seen positive results. in january the oldest case being worked for proposed disability rating was 254 days. today there were no cases over 280 days. from february of 2011 to april of 2012 we have reduced the average claim development time by 62% and a medical examination time by 60%. on april 5th i committed to the army vice chief of staff that va would clear within 60 days the entire inventory of army cases awaiting proposed rating decisions. we have cleared 76% of those for both preliminary and final ratings the combined productivity of our three disability rating activity sites increased 15% in the last month. we have several projects to enhance our efficiency and effectiveness such as veteran tracking application that will increase the pool of information electronically from dod to va and electronic case file transfer system. we have made progress in improving transparency, improving consistency and reducing process time but our biggest achievement has been closing the benefit gap. serve as members no longer wait six to nine months to receive compensation they have learned. yet with all these achievements we are not satisfied because we are not meeting the requirement for every single service member. we will continue to work with dod to improve systems and processes until we achieve all of our objectives in 100 days for each service member. i will often referred to cases or claims today but let me assure you i never lose sight of the fact that behind the claim is a service member and his or her family who depend on va to get it right. we will continue to partner with dod to effectively and be efficiently get him or her back to their unit to continue military service or if discharge provide the benefits they have earned. as partners we will overcome the remaining challenges. together to achieve the seamless transition service members deserve. this is a commitment we must meet. i look forward to answering any questions you may have. >> thanks very much. mr bertoni. >> chairman murray, ranking member burr, i am pleased to discuss department of defense veterans affairs performance of the integrated fiscally evaluation system which is the standard process for disabilities worldwide. since it started to monitor the evolution, we made several recommendations for other challenges. my statement is based on the ongoing work for the committee and focus on how ides is meeting ongoing efforts to improve performance. we found overall time is worse than the average days to complete can't claims for active-duty service that is increasing from 283 days in 2008 to 394 days last year. that is well above the stated goal of 295 days. in the same period the proportion of active duty cases also decreased very steeply from 63% to 19%. with the exception of the physical valuation board phase ides claims fell short of interim medical evaluation board, transition, benefit phases. processing delays were significant completing medical evaluation board processing. in 2011 only 20% of active duty cases met the goal for obtaining medical board decisions. in addition to timeliness service member satisfaction, which we found had shortcomings in administration such as limiting who received the survey and competing average scores in a way that may overstate satisfaction and limit usefulness of this data in performance management. using an alternative calculation that eliminates mutual responses we found satisfaction rates several times lower than the of the reports. taking a number of actions to address ides challenges which we identified in prior work. for example prior recommendation top leadership developed a more robust monitoring and oversight process to improve communication and accountability which include more frequent contact between the departments to discuss progress of various funds. regular meetings by the chief of staff that includes reviews of performance and for local and regional facility commanders to provide feedback on best practices for current challenges. va hold conferences with local staff responsible for their portion of the process. the department are working to address longstanding medical board and va ratings challenges. the army is in the midst of hiring double medical board staff including liaison, physician and support personnel. va tripled staffing at ides rating sites. departments also working to address limitations in the automated systems including taking steps to improve the ability of local facilities to electronically track and monitor case progress and improve quality of case data which we found to be problematic. key of gray dust appending and various sites rely on at hawk local and potentially redundant processes to manage their cases. despite efforts by dod to improve data quality the current ides tracking system lacks control to prevent staff entering erroneous data. keeping case load date and accurate will remain challenging going forward. to further improve and expedite, dod has initiated a process review to understand how each that impact processing times to identify further ides opportunities. such an effort could you short and long term recommendations for improvements. timetable for completion is yet to be established. in conclusion of a merger of two disability evaluation systems shows promise for expediting benefits to service but nearly five years out delays continue to affect progress and the causes are not fully understood. recent initiative to improve processing and isolate problems are promising but remains to be seen what their long-term impact will be. we will continue to assess dot process as we proceed to work for the committee. this concludes my statement and i will answer any questions you might have. >> i want to let committee members know that following the revelation that hundreds of soldiers had their pt sp diagnosed because people did not want to spend money on care and benefits these service members would receive i asked our committee staff to investigate the evaluation system. we are an interim debt that in this investigation. today staff has reviewed 121 cases from 23 different ides site focusing on mental health diagnosis in general and ptsd diagnosis in particular. i am troubled by what they found. they found evaluations that focus on perceived exaggeration similar to what we saw at madigan. without documentation of opprobrious standardize interview techniques. they have encountered in adequate medical examinations especially in relation to brain injuries and rating decisions based -- issued as part of the joint process containing errors which in some cases impact the level of benefits to veterans should have received. before we begin today's questions i am entering the results of this investigation into the record at this point and there will be more to come. let me start with dr. jo ann rooney. we have had discussions about the joint disability evaluation system and the challenges service members face going through this process. it has come to my attention that our service members involved in the disability process, and unsupported behavior from the chains of command with a limited duty and waiting for disability decisions. service members forced to participate in activities in direct violation of doctor's orders to have been disciplined for behavior of health conditions who struggled to get access to care, and cooperate with treatment requirements. i think you agree with me that is completely unacceptable. and leaders understand these medical issues and difficult process that service members are going through and have to provide leadership and support these men and women need. i begin by asking you what needs to be done to provide supportive and compassionate leadership for these injured service members the decision. >> the information you just shared is troubling on many levels and i would be interested in speaking with you and your staff so we can determine what these issues are occurring. and the leadership does know that -- which is the department's position and leadership at many levels i am familiar with that that cannot be tolerated. we must understand what is necessary for the care. there are no sticklers associated with being able to address behavioral or mental health issues and that is a department position. in those cases if there are substantive issues not only do we need to find out where those are to work directly with that leadership and correct that situation we can continue with our ongoing work at all levels of command not just at the senior level but we understand it needs to go through the command level of every installation to assure that the situation is not occurring. >> we need to make sure that is happening because these are challenging situations and retribution should not be tolerated whether it is one case or many. i will share those with you but i want to make sure systemwide leaders throughout the chain of command all the way to the bottom are clearly understanding what these voters are going through and not having any kind of repercussions on those individuals. >> from the perspective of someone who served in many leadership positions in the military what can we do to educate our military leaders on not only this process but medical issues facing so many young men and women? >> i see a lot of things the army is doing because i have been -- we are told they are now bringing in layers of the way to the vice chief of staff. and current level discussion groups, major-general all the way up to those discussion groups. getting the information out is the biggest key and the biggest challenge we have. the secretary spoke to the sergeant major academy and the army and sergeant majors understanding this is a problem we have to take on, two departments and not just one. >> a lot of work to do. there is no doubt that the events of madigan have shaken trust and confidence of service members in the disability evaluation system. i believe transparency and sharing information about the revaluations happening today and actions from the army and dod taking to remedy this situation will go along way towards restoring trust in the system. i wanted to ask you today what we learn from the investigation the army is conducting at madigan. >> as you pointed out earlier there have been 1963 evaluations completed of which 108 of those have been diagnosed as having ptsd. >> let me just say they had been diagnosed with ptsd. they were told they did not. you said you did indeed -- >> 108 of 190. >> there are 419 that have been determined -- 287 from the original looked at. the army actually opened the aperture up. and forensic psychiatrists, it was 419. eligible for re-evaluation. at this point there are three in progress and will schedule. what we learned -- the process put into place at that time did not function as originally designed. there was a mean-spirited attempt really to create, they similar diagnoses. that was not something that occurred so the army has taken lessons from here and is going back to 2001 to reevaluate all the cases where we might have a similar situation. we are not only learning from what army is doing and looking at these revaluations but reducing new standards that in many ways advances in medical and behavioral health areas to better diagnosis ptsd but taking those lessons learned across the other services as well. sins army has the greatest majority of